Spanish Bank Santander agrees to buy Alliance & Leicester

Spanish Bank Santander agrees to buy Alliance & Leicester
Tuesday 15 ^thJuly 2008

Banco Santander has agreed a deal to buy Alliance & Leicester. This is not the first take over by the company, 2004 saw the bank purchase high street lender Abbey. Both Abbey and A&L have been affected by the recent credit crunch with annual profits for A&L drop by 30% last year and both reducing the number of mortgage offers and increasing prices of mortgage deals as a result.

If the deal goes ahead it is possible that a merger of the British two lenders will create a super bank, although this is not confirmed this has sparked debate on whether this action would create too much power in the hands of the bigger banking operators and reduce consumer choice. On the plus side a large bank such as this could offer customers better deals and interest rates.

If you currently have a mortgage or savings account with either A&L or Abbey a takeover and subsequent merger would not affect you in the short term. It appears that the only losers could be staff. Alliance and Leicester currently employ around 7,000 staff and it is feared that Santander will be looking to reduce staffing numbers in a bid to save money.

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