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B&B nationalised, savings biz sold to Banco Santander

Source: PTI
September 29, 2008 15:53 IST
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Spain's banking major Banco Santander SA will take over the retail deposits and branch network of Bradford & Bingley for 612 million pounds following announcement of the British government to nationalise B&B, which had suffered huge credit-related losses.

The assets would be taken over by Santander subsidiary Abbey National Plc and the transfer would comprise 20 billion pounds of retail deposit along with 2.7 million customers and related employees, Spanish bank said in a filing with the regulator.

The acquisition price will be 612 million pounds, including the transfer of 208 million pounds of capital relating to offshore companies, the filing added.

As per the Treasury announcement, all of B&B's customer loans and treasury assets, which includes the 41 billion pounds of mortgage assets, will be taken under public ownership.

Meanwhile, the board of Bradford & Bingley said on Monday the Treasury has acquired all its shares and all share options as well as other entitlements to shares issued by the British mortgage lender have been extinguished and the Group's savings business and branches have been transferred to the Banco Santander group.

"Mortgage customers should continue to make payments as usual. Both the savings business and mortgage operations will continue to operate as normal through these changes and branches, ATMs and on-line accounts will all be operating as usual," Bradford & Bingley said.

The acquisition would further strengthen Abbey's retail customer deposit base and franchise. It also allows Santander

to deliver increased critical mass in the UK through greater distribution scale.

"This is good news for Bradford & Bingley's savings customers. They can be certain that their hard-earned savings are with a bank they can trust as Abbey is part of the Santander Group, one of the world's most successful banks," Abbey Chief Executive Antonio Horta-Osorio said.

The combined business of Abbey, Alliance & Leicester and B&B would have 1,286 branches with a good geographic spread across the UK. In addition, it is also expected that upon completion of the transfer, the combined business would have a customer base of 24 million.

The transfer of deposits and the branch network further increases the scale of our operations in the UK to around 10 per cent of the market, Santander said.

"We will significantly increase the potential of our distribution capability through the additional branches and have brought a further 2.7 million customers to the bank," Santander added.

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