Santander owner of Abbey and Alliance & Leicester: Under Pressure

Santander the Spanish bank who owns Abbey, Bradford & Bingley’s saving business and Alliance & Leicester is now under immense pressure to raise capital to stay ahead of its European competition who took the Government bailout.

Santander turned down the Governments cash hand out, and decided to move £1 billion from another part of its company to its UK business which boosted the tier-one ratio for Abbey and A&L to around 9.25 percent.

However, Santander’s group tier-one ratio does not look that good now at a much weaker 7.89 percent and its core tier one ratio at a low 6.31 percent, considering the average European major bank average being over 9 percent for core capital, according to analysts at Merrill Lynch.

But with the Spanish property market falling and the country heading for a recession it raises concerns if it can withstand the pressure from both continents within this global financial crisis.

Source: Independant