The ratings on Santander UK PLC (Santander UK) are based on its position in the Banco Santander group (Santander; AA/Negative/A-1+), and its position as one of the leading providers of domestic financial services. Standard&Poor's Ratings Services considers the bank to be of high systemic importance in the U.K., although its business diversity and market position will remain more limited than the top tier of U.K. banking peers. While Santander UK has not been immune from the adverse economic and market environment in the U.K., we consider that the bank will continue to demonstrate resilient earnings performance. In our view, the weakest element of the bank's financial profile is capitalization, although we expect sustained improvement through 2011. With reported
