Santander’s bid for A&L puts jobs at risk

by Gill Montia

Story link: Santander’s bid for A&L puts jobs at risk

Santander’s proposed acquisition of Alliance & Leicester (A&L) has led to fears of further job cuts in the UK banking sector.

Spanish bank Santander has said it expects to save £180 million a year from a merger of its existing UK business, Abbey, and A&L. The group expects to achieve this by 2011.

If shareholders approve the acquisition proposal, the merged business will have 959 branches.

A&L’s branch network stands at 250 and while it is known that Abbey has plans to extend its High Street presence, some branch closures would be inevitable.

Santander is already remembered for the scale of the jobs losses in its takeover of Abbey in 2005, which amounted to around 4,000.

Meanwhile, Santander has today made it clear that it is keen to possess A&L’s 19 business centres, which are located across the UK and would enable the former to expand its presence in the UK small and medium-sized company market.

A&L, which employs around 7,300 staff, has been seen as a takeover target for some months.

Its lending volumes are expected to fall this year, as are its profit margins which have been hit by the rising cost of borrowing on the wholesale money markets.

However, the field may not be clear for Santander as today’s announcement may prompt counter-bids.