Santander moves ahead with integrating its UK businesses

The integration of Santander's UK businesses, which includes Abbey, Alliance & Leicester (A&L) and Bradford & Bingley's (B&B) savings business, is progressing according to plan.

In order to continue growing its UK business and enable further investment in its frontline services and branches, Santander will be making efficiencies through transferring operations onto Santander's proprietary IT platform, Partenon, as well as removing duplicated back office and support functions across the businesses. Therefore, the bank will reduce its combined UK workforce by approximately 1,900 in 2009.

The efficiencies are part of the commitment made by Santander to realise cost savings of £180 million by the end of 2011 following the acquisition of A&L. There will be minimal impact on customer-facing roles in branches and call centres, and the business will continue to prioritise improving customer service. The focus of the reductions will be in back office roles and across operational and head office sites. The bank has no current plans to close major sites although it may consolidate some smaller offices into larger sites.

António Horta-Osório, Chief Executive of the combined UK business, said: "Santander is committed to continuing the growth of its UK businesses profitably and has already shown through Abbey that it can drive efficiencies in operational areas in order to grow its retail business and provide customers with greater value-for-money products. At our Q3 trading update, Abbey increased profits and grew market share in mortgages, savings, current accounts and investments, demonstrating that we are continuing to lend whilst being seen as a safe haven for customers' deposits.

"Today's announcement shows we are on track to fulfil the commitment we made at the time of the Alliance & Leicester acquisition to grow our UK business whilst ensuring we meet our cost saving targets.

"Santander is committed to its branch network in the UK, reflecting its status as one of the world's leading retail banks, with the largest international retail branch network in the world. The combined UK business now has nearly 1,300 branches which we expect to maintain or slightly increase in the near term."

The combination of the three businesses moves Santander toward its goal of being a significant player in the UK with sizeable market share. The combined business in the UK has market shares above ten per cent in mortgages, savings and branches.

In addition, the acquisition of Alliance & Leicester enables the bank to accelerate its growth plans in the SME market. The combined business has already increased lending by 25% in 2008 and is opening over 1,500 business accounts each week. Over the next 12 months, we will extend our product range to small and larger business customers and will look to recruit up to 100 small business advisers for the Abbey branch network.

In 2009, Bradford & Bingley will move onto the Group's IT platform enabling B&B customers to benefit from the range of value-for-money products available to Abbey customers. As such, Abbey has already added to its savings business by taking on B&B's 40 mortgage advisers in order to be able to offer the Abbey mortgage range to B&B customers.