Santander rejects NatWest's nearly $15 billion bid for UK retail unit, FT reports

(Reuters) -Banco Santander has rejected an offer of around 11 billion pounds ($14.63 billion) from NatWest for its UK retail bank, saying the bid undervalued the business, the Financial Times reported on Friday.

The approach by the state-backed British lender, which was being advised by Morgan Stanley and UBS, is no longer live, the report said, citing people familiar with the matter.

"The UK (operations) is not for sale and is a core part of Santander's diversified business model which is proven to deliver attractive, sustainable returns over the long term," a Santander spokesperson told Reuters.

Barclays had also approached Santander with a potential bid for its UK operations, Reuters reported in January, citing sources familiar with the matter. The talks did not progress as Santander was reassessing its UK presence.

A NatWest Group spokeperson said "we do not comment on speculation," when contacted by Reuters.

Santander competes with banks including Lloyds Banking Group and Barclays in Britain, which is one of 10 markets the Spanish bank considers key, apart from Mexico, Brazil and its home market in Spain.

($1 = 0.7519 pounds)

(Reporting by Aatrayee Chatterjee in Bengaluru, additional reporting by Unnamalai L and Bageshri Banerjee; Editing by Shailesh Kuber)