Spanish Banking Group continues its buying spree

Last week there seemed to be only one story dominating the financial press, this being the return to health – aka declaration of substantial profits – of the four main UK banks. This story ran and ran and was one of the few financial stories that crossed over to pretty much all of the mainstream newspapers.

One enduring story involving a bank which has not received that many recent column inches is the ongoing acquisition trail of Santander Bank. The Spanish banking group has been actively on the acquisition trail for a number of years now and the Sub Prime crisis of 2008 / 2009 didn’t really deter it from its strategy. In fact, it could be argued that during 2008 and 2009 Santander were able to make the most of the opportunities that the crisis presented them with. In the UK they purchased Alliance & Leicester, having previously acquired Abbey National back in 2004. Their expansion plans have not been limited to the UK, with them fully acquiring Sovereign Bancorp of the US and Banco ABN Amro Real of Brazil, among others, all over the world.

There is current speculation that they are planning an IPO on the LSE for Santander UK (the consolidated entity of all of their UK acquisitions), which, if it went ahead, analysts believe would enable Banco Santander (the Parent company) to recoup some of its investment in the UK banking sector.

But it could be argued that as British tax payers, we should be glad that Santander has been aggressive in its pursuit of growth because it has recently announced a preliminary deal to acquire 318 branches from the Royal Bank of Scotland which, given that the British public perceives RBS as “our” bank, means the British Government and ultimately tax payers will benefit through the sale. Santander also stepped in back in late 2008 when the newly nationalised Bradford and Bingley disposed of its saving accounts and branches to Santander via the Abbey National. HSBC, although not a nationalised British bank, has also benefited. Santander have agreed to buy $4.3bn of car loans, this being part of HSBC’s strategy to clean up its US consumer financing division.

This magnanimous activity is not limited to the UK, Santander also acquired 173 branches in Germany from SEB of Sweden and will no doubt continue to maximise opportunities presented to it by less well placed banking groups.

Filed under: Spanish, Banking