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Santander set for Alliance & Leicester takeover
16 July 2008 11:30
Spanish banking giant Santander looks set to acquire Alliance & Leicester after making a successful bid for the lender, in a move that may have significant consequences for borrowers.
Santander, who paid £9.5 billion for Abbey in 2004, has reached an agreement to buy Alliance & Leicester for £1.26 billion in a deal that will expand its share of the mortgage market to around 14 per cent, making it Britain's second largest lender behind Halifax.
Commentators have suggested that this takeover will inject some much-needed confidence into the British banking sector, as well as securing the future of a lender badly hit by the credit crunch.
Reviewing the deal, Association of Mortgage Intermediaries director general Chris Cummings asserted that it was 'positive news' for the UK mortgage market, enhancing its stability and providing some reassurance about its continuing robustness.
He admitted that consumer choice could however be harmed by this consolidation of the market, something he said that the Financial Services' Authority will now have to consider, but argued that borrowers will ultimately benefit if the industry is strengthened.
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