Spanish bank Santander has sent a note to senior managers as it assesses the future of its UK operations amid growing dissatisfaction with regulation.

John Baldwin, chief executive of Santander's UK corporate and business bank, sent out a memo outlining how to respond to customers and its 21,000 UK staff who were rattled by news that the bank could be put up for sale.

Meanwhile, the Labor government is putting pressure on City regulators to do more to boost economic growth, including watering down post-financial crisis regulations that ministers and bank bosses fear will stifle growth and drive away foreign investment.

Santander bosses have long been frustrated by UK rules, including ring-fencing rules that force larger banks to separate their consumer deposits from other investment banking operations and protect them. Regulators have pledged to loosen some of these restrictions, although the proposals so far have been aimed at supporting smaller banks with smaller deposits.

Santander, which entered UK retail banking with the acquisition of Abbey National Building Society in 2004, is also grappling with the fallout from the growing Motor Finance Commission scandal, analysts at RBC Capital said , the scandal could cost the bank up to £1.9 billion in compensation.

The bank confirmed in October that it would cut 1,400 jobs across its UK operations as part of an effort to cut costs.

The internal note to senior managers, signed and approved by Ana Botín, executive chairman of Madrid-based parent Santander, said that if someone asked "are you really reviewing yourself in the UK?" business?” Bosses should respond that Santander executives “review strategic priorities across all our markets every year as part of business as usual.”

Asked whether the bank was "planning to exit the UK", bosses were instructed to say: "The UK is a core market for Santander. That has not changed. We remain focused on delivering our strategic priorities and continuing to deliver for the UK Serving 14 million customers.”

Baldwin's memo added: "If you were asked, I believe it would be helpful and strengthen the bank's position."

The Financial Times first reported Santander's possible exit, months after the bank was forced to delay the release of its third-quarter results amid the Auto Finance Commission scandal.

An October court ruling significantly expanded an ongoing investigation into the Auto Finance Commission and sent compensation estimates soaring. Ratings agency Moody's said banks including Santander could face bills of up to 30 billion pounds unless the Supreme Court overturns the case in April.

Britain's Santander responded to the court ruling by setting aside 295 million pounds to cover potential payouts from car loan customers in November, sending its third-quarter profit down to 143 million pounds from 413 million pounds in the previous three months.

A Santander spokesman said: "The UK is a core market for Santander and this has not changed."