Sant Uk.10te% Regulatory News (SAN)

29 Sep 2008 08:45



MATERIAL FACT ANNOUNCEMENT

Bradford & Bingley's direct channels and retail deposits to transfer to Abbey

Following the announcement by HM Treasury (29 September 2008) to take Bradford & Bingley plc (B&B) into public ownership, the retail deposits, branch network and its related employees will transfer, under the provisions of the Banking (Special Provisions) Act 2008, to Abbey National plc ("Abbey"), a wholly-owned subsidiary of Banco Santander S.A. ("Santander").

As outlined in the HM Treasury statement, all of B&B's customer loans and treasury assets, which includes the £41 billion of mortgage assets, will be taken under public ownership.

The transfer to Abbey consists of:

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

The transfer of the B&B's customers and their retail deposits further strengthens Abbey's retail customer deposit base and franchise. It also allows Santander to deliver increased critical mass in the UK through greater distribution scale. 

The combined business of Abbey, Alliance & Leicester (A&L) and B&B will have 1,286 branches with a good geographic spread across the UK. In addition, it is also expected that upon completion of the transfer, Santander's UK market share of retail deposits will increase to around 10%1, and the combined business will also have a customer base of 24 million.

António Horta-Osório, Chief Executive of Abbey, said: "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. It has an AA credit rating and a strong retail focus with more branches worldwide than any other international bank. As such, Santander has been well-positioned to succeed in the current market turbulence.

"The transfer of deposits and the branch network further increases the scale of our operations in the UK to around 10% of the market, an important strategic objective for us. 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."

Bradford & Bingley's customers will continue to use their existing channels - branches, telephone and internet - for transactions, as usual. The Bradford & Bingley brand will also remain.

1 Retail deposit market share based upon combination of Abbey, A&L and B&B, subject to the successful completion of A&L transaction and transfer of B&B retail deposits.

Boadilla del Monte (Madrid) 29 September, 2008