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‘A&L cannot grow without outside investment’

Alliance & Leicester needs to be sold if it is to achieve further growth, say leading mortgage brokers.

The lender has been linked with takeover bids by Spain’s Banco Santander and French finance house Credit Agricole, which last week admitted an interest in A&L.

Brokers believe that A&L has reached the peak of its growth potential under its current model and now needs further investment to challenge the lending giants such as HBOS.

Purely Mortgages chief executive Mark Chilton expects more banks will take an interest in A&L although he thinks any bids will come from abroad.

Chilton says: “A&L took the mortgage market by storm last year. It is efficient, well run and is the sort firm I would look for if I was a foreign bank. You would never have thought of it as a serious entity a few years ago but, because it does not have the size to compete with HBOS, it has made itself an attractive bid target.”

A&L, which is not commenting on the speculation other than to acknowledge CA’s interest, has announced plans to move into the sub-prime, self-cert and buy-to-let markets later this year, funded by an unnamed investment bank but branded A&L.

Alexander Hall chief operating officer Andy Pratt says: “A&L could challenge HBOS but it would need some serious investment. It has grown to a level which is probably as far as it can get to.”

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This week in Pensions

What a week for pensions. Not even pictures of John Prescott playing croquet in the garden of his grace and favour home could stop pensions stories from getting top billing in the papers last week.

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