Banco Santander Central Hispano has written to IFAs who sell Abbey products to tell them how their business relationship will develop if its takeover bid goes ahead.
The letter, signed by Santander executive vice-president Juan Rodríguez Inciarte says: “Our aim is to drive business in all of our channels, maximising business through Abbey's existing brand in the intermediary market, Abbey for Intermediaries and increasing branch-based business volumes.”
The letter says a central part of the new relationship will be the extension of its IT systems, investment in customer-facing areas and improvement of back-office operations.
Last week, Santander sold half of its shares in Royal Bank of Scotland, reducing its stake to 2.5 per cent, giving it more cash if HBOS decides to bid and reducing its stake in a potential competitor. Santander backed RBS's acquisition of NatWest in 2000, when it outbid Bank of Scotland.
HBOS is reported to be planning a £10.5m bid and could decide by the end of this week whether it will launch a counter-bid.
Savills Private Finance associate Tom Bland says the Santander bid relies on back-office strength. He says: “HBOS is big enough already in UK lending and making it bigger would put a lot of pressure on systems.”
Timothy James & Partners adviser Robert Guy says: “Strategically, the focus should be on the shareholders and what is best for them. Speaking as a broker, I would say that Abbey has lost their way with intermediaries, especially since its rebranding. An acquisition, whoever is successful, should help them find their focus.”