(Adds details on possible candidates, IPO plans)
By Steve Slater and Brenda Goh
LONDON, April 30 (Reuters) - The British arm of Spanish bankSantander said its chairman Terry Burns is steppingdown and it intends to have his replacement in place by the endof the year, as the UK business prepares for a stock marketlisting.
Santander UK, which signaled a turnaround programme is ontrack earlier this week by reporting strong profit growth, couldget its own listing later this year or early in 2015.
That would require clarity in the leadership and SantanderUK said on Wednesday Burns, 70, will stay as chairman until areplacement is found.
A frontrunner to replace him could be Bruce Carnegie-Brown,who is a non-executive director of Santander UK and worked forU.S. bank JPMorgan and several insurers.
But some executive recruiters and industry insiders havewarned of a shallow pool of top qualified candidates, and rivalsBarclays, Royal Bank of Scotland and Nationwide are also expected to be on the hunt for chairmen.
Bank chairmen are expected to have wide banking andregulatory experience as well as being untarnished by thefinancial crisis of 2008 and 2009.
Burns' exit is not a surprise as he has been chairman sinceFebruary 2002 and in January he resigned from the board of theMadrid-based Santander group.
But it adds to potential change at the top of UK business,which is still awaiting the arrival of Nathan Bostock as deputychief executive, after announcing in December it had poached himfrom RBS. UK Chief Executive Ana Botin is also tipped to replaceher father to run the group at some stage.
A flotation of the UK business has been under considerationfor several years, but was delayed by the UK recession and ashift in focus to more profitable business loans and reducedlending to home owners.
That rebalancing is nearing completion and the bank said itis winning customers who are switching from rival banks and wasbenefiting from an improving UK economy.
Santander UK, which has 15 million customers, about 1,200branches and 24,000 staff, made a pretax profit of 416 millionpounds in the first quarter of this year, up 48 percent from ayear ago as revenue rose 13 percent on the back of a sharp risein margins.
It contributed a fifth of Santander's group profits,matching Brazil as the biggest contributors. (Editing by Matt Scuffham and David Holmes)