Job fears as Santander to save £180m a year

The fears for the jobs came after Santander made plain it expects to use the same tactics it used after its 2004 takeover of Abbey, a deal that has seen 7000 posts eliminated at Abbey to leave a workforce of 16,000.

Alliance & Leicester has about 7300 staff and many of its branches will be on the same street maybe even opposite in city centres and provincial towns up and down the country.

In a statement, Santander said: "Santander's strategy requires it to be a significant local player and achieve market shares of close to 10%. The combination of A&L and Abbey will deliver increased critical mass for the Santander Group in the UK. The combined business will have 959 branches, which will represent a share of 7.6% in the UK market. It is also expected to have combined market shares in savings and unsecured personal loans in the UK in excess of 8%.

"A top down analysis of potential efficiencies and integration benefits conducted by Santander suggests the acquisition of A&L will lead to annualised costs savings of more than £180 million by the end of 2011. The figure has been calculated by Santander management on the basis of prior transactions including the acquisition of Abbey."

Clues to today's deal have been laid by Abbey's Portuguese boss Antonio Horta-Osorio. Recently he said he was hatching plans to grow Abbey's network by 300 branches over the next four years, which he would do substantially with A&L's 250 outlets.

Also behind today's deal is Abbey's fearsome proprietary IT platform Partenon, regarded as state-of-the-art in the industry in its ability to cross-sell products to customers and ready, says Horta-Osorio, to take on more work.

And while many analysts have been sniffy about the attractions of A&L to any bidder, Santander said today another boon of the deal would be to get its hands on A&L's network of 19 business centres around the UK and take it further into the British small and medium-sized company market.