| Banco Santander prepares to take over Abbey National The European banking industry is preparing for the emergence of a new giant. Yesterday, the largest bank in Spain and Latin America, Banco Santander Central Hispano SA (BSCH), made an offer to the British mortgage bank Abbey National, which it could not accept. According to Reuters, BSCH is ready to buy Abbey shares at a rate of $10.12 to $11.09 per share. The total value of the deal is estimated at $15.7 billion. In fact, this is the first takeover of a British bank by a foreign competitor since the merger of Midland and HSBC in 1992. As a result of this union, the fourth largest bank in Europe and the eighth in the world will be born.
The Spanish banking group was formed in 1999, after the merger of Banco Santander and Banco Central Hispano. It currently has 4,300 branches in Spain and more than 4,000 in Latin America. Many experts agree that the bank is now in excellent shape. Over the past seven years, he has spent over $30 billion on the acquisition of various financial structures. Its services are used by a total of 22 million clients in 30 countries. BSCH generates the bulk of its revenue from retail operations. Experts explain the interest in acquiring Abbey by the decline in BSCH's profits from operations in Latin America over the past two years. "The acquisition of Abbey is an excellent platform for entering the British market. The total profit pool of British banks is approximately three times the size of the French and seven times the German market," BSCH head Alfredo Saenz explained the expansion.
Abbey, which has 741 branches worldwide, is Britain's sixth largest bank by assets and Europe's largest mortgage market operator. Its market capitalization exceeds $13.2 billion. But things have been getting worse lately. At the end of 2003, losses amounted to $1.2 billion. A year earlier, financial achievements were completely disastrous - losses in the amount of $1.7 billion. “It very rarely happens that a foreign bank has such an opportunity as this - to enter the market "Given the problems that Abbey has faced, this is a serious application," said an analyst at the London branch of independent research company CreditSights Inc. Simon Adamson.
Already this year, analysts predict Abbey will emerge from the crisis and return to profit. However, in the current situation, the deadlines can no longer fully reassure the bank’s 1.7 million shareholders. They have been waiting for changes for several years now. A source of concern is a failed merger attempt with powerful rival Lloyds TSB. In 2001, this representative of Britain's Big Four offered 18 billion pounds for Abbey. Since the deal fell through due to a protest from the antimonopoly authorities, shareholders have been waiting for new proposals. The prospects that have now opened should satisfy the appetites of the tired co-owners. As a result of the merger, the market value of their stakes should increase by at least a quarter. Denis UVAROV |
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