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Hedgehog Hall of Fame: Santander UK plc – Managing a downgrade effectively

28th August 2013


Company: Santander UK plc Campaign: Santander UK plc – Managing a downgrade effectively Category: Crisis Management Campaign of the Year - South - WINNER Objectives On May 17th 2012, ratings agency Moodys downgraded Santander UK plc by ‘one-notch’. Whilst these decisions do not normally trigger consumer news – this time was different.   Bankia, a Spanish bank had just reported €1bn outflows, and Moodys downgraded Santander UK as a subsidiary of its parent, Banco Santander, and separate from the other UK banks. This meant Santander led the News at Ten on ITV with the suggestion that the ‘eurozone crisis had finally hit the UK high streets’ and coverage on May 18th from the Daily Mail suggesting that there could be a ‘run’ on Santander UK. The brief was simple – save the bank and prevent outflows exceeding the expected short-term activity that always occurs with a ‘one-notch’ downgrade. Strategy & Target Audience UK consumers; opinion formers and politicians; SMEs; and, staff. We enacted a full crisis response; engaging all major media to ensure they understood the Santander subsidiary model and how this protects UK customers; plus undertaking a concerted outreach programme to Number 10, the FSA, Number 11, HMT and David Cameron’s office to ensure that when they were approached they would understand the position and respond appropriately. Action The truth is that the efforts of May 18th, which included concerted outreach, were significantly aided and abetted by over 2 years of briefings undertaken with media and senior political figures, plus the regulator.  This groundwork was all about ensuring the media understood our structure and the Santander ‘firewall’ to ensure that when this sort of event occurred, it wasn’t the first time we were communicating the messages integral to our position. War-room • Hourly phone calls with CEO, Steve Pateman (Head of UK Banking) • Agreed key messages: - Santander UK is hermetically sealed from its parent; - The only way money can be ‘sent to Spain’ is through a dividend or loan, both of which would have to be approved by the FSA; - The FSA would only do this, if Santander UK could continue to meet its capital and liquidity requirements as a regulated UK bank; and, - All savers are protected by the Financial Services Compensation Scheme to £85,000 per person. Monitoring • Using our established social media monitoring tool, tracked sentiment and comments were reported hourly throughout May 18th and over the weekend. • Corrected copy where required Media outreach • Steve Patemen and the Head of Media relations proactively contacted: - Broadcast: Robert Peston (BBC), Mark Kleinman (Sky), Laura Kuenssberg (ITN). - Wires: PA, Reuters, Dow Jones, Bloomberg. - Key opinion formers on national newspapers including: Alex Brummer (Daily Mail); Patrick Jenkins (FT); Patrick Hosking (The Times); Damian Reece (The Telegraph); Jill Treanor (The Guardian); Steve Hawkes (The Sun); Graham Hiscott (The Mirror); Iain Dey (The Sunday Times); David Enrich (Wall St Journal Europe); Martin Lewis (Moneysavingexpert) Working the network • We briefed: Chancellor, Mervyn King (BoE), Rupert Harrison, Paul Tucker, Andrew Bailey, Mark Hoban, Michael Fallon, Andrew Tyrie, Stephen Green, Vince Cable, Ed Balls, Alistair Darling. Supporting our internal colleagues • Retail Distribution - Briefing call with divisional directors at 8.30am, and establishment of an escalation process to ensure we could talk to customers wishing to withdraw large sums, and look out for queues - Note to top 150 staff circulated at 9.30am with Q&A. - Strength and safety presentation distributed to all; including link to internal video produced in January 2012 on the subsidiary model. - Arranged senior management visibility through-out the weekend. • Corporate Banking - Senior leader briefing to Corporate and Global Banking & Markets team. - Statement on Moodys sent to key clients - Detailed Q&A developed for use with clients. Results Against the expected outflow of £600m; we saw £200m net losses on Friday 18th May.   By Monday 21st of May business flows had returned to normal. At the same time, as reported in our 1H results the business not only survived, but thrived.   We have opened 700,000 new current accounts and seen £6.9bn new inflows in savings in the last six months. Against the two defined objectives – we are of course still in business; and secondly we manage outflows at circa 30pc of the expected level, despite the adverse coverage, and perhaps because of the significant presence of messages in the media around the ring-fence and FSCS cover. The PRmoment Golden Hedgehog Awards 2014 are now open for entries. Here are this years updated categories.

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