The Spanish have landed

Santander gained a foothold in the UK when it bought Abbey in 2004, and continued to build its presence in the UK banking sector when it acquired Alliance & Leicester, and part of Bradford & Bingley during last year's banking crisis.

Commenting on today's announcement from Santander that all three UK brands will be amalgamated under the Santander name, Kevin Mountford, head of banking at moneysupermarket.com (LON:MONY), said; "The decision to re-brand all the separate entities under the Santander name was expected, but not quite so soon. And although some consolidation within the banking sector as a whole has to be anticipated, we are now seeing the emergence of a new banking super brand.

"Consumers will need to keep their eyes peeled to see how this will affect them, as there can be no doubt the consolidation process will leave some casualties. There are currently three brands offering a range of different products, with different customer propositions. Individually Alliance & Leicester, Bradford & Bingley and Abbey all offered some well priced, good value products that challenged the big four clearing banks. However, when all the brands are combined under Santander we must expect there to be a reduction in choice and competition on the high street.

"After all, we have already seen some reduction in competition since Alliance & Leicester was taken over by Santander, with recent Alliance & Leicester current account offers not being made available to Abbey current account customers.

"Whilst there will be a reduction in choice and competition from the re-branding exercise, I hope Santander will continue to challenge the main high street banks by offering good value products and excellent customer service.

"The other key issue for savers is the cover provided by the Financial Services Compensation Scheme. At the moment UK banks owned by Santander currently operate under two banking licences. One covers Abbey, Bradford & Bingley and Cahoot, the other covers Alliance & Leicester. This means savers are 100 per cent covered by the Financial Services Compensation Scheme (FSCS) for up to £50,000 across Abbey, Bradford & Bingley and Cahoot, and they are also covered for a further £50,000 with Alliance & Leicester. Abbey and Bradford & Bingley are being rebranded first, meaning Alliance & Leicester will run as a separate business under its own name and its own licence until next summer, so the two licences will stay in place until at least mid 2010. Savers with larger balances in both A&L and Abbey / B&B will need to review their arrangements if they total more than £50,000, but not until mid next year."