Santander, the enormous Spanish finance group, is considering a potential flotation of its UK operation which now includes Abbey, Bradford & Bingley and Alliance & Leicester. Central to these plans appears to be the possibility of acquiring up to 300 branches from Royal Bank of Scotland which has been forced to reduce its high-street exposure by the European commission.

The sale of Royal Bank of Scotland high street branches is very much at an early stage but there is no doubt that companies such as Santander are interested. Official figures show that Santander now sells around half of all UK mortgages and has a very tight grip of the UK mortgage arena. It will be interesting to see whether the company does look to separate the UK division, a division which was recently rebranded as Santander.

The last two years, and the next two years, have seen a massive change in the UK banking industry which is now paying the price for overindulgence in the boom years. Companies such as Santander appear to have timed the acquisition of UK companies to perfection, taking advantage of difficult periods for individual companies such as Abbey, Bradford & Bingley and Alliance & Leicester and putting together a quality UK operation.

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