Santander's Abbey to pay cash for B&B assets
MADRID, Sept 29 (Reuters) - Santander (SAN.MC) said on Monday that its British unit Abbey, bought in 2004, will pay cash for Bradford & Bingley's BB.L retail deposits and branch network.
Speaking to analysts, management at Spain's biggest bank said that as Abbey is acquiring the deposit base, the unit will pay from its own resources.
Earlier, Spain's biggest banking group said it will pay 612 million pounds ($1.10 billion) to buy Britain's ninth biggest mortgage provider's deposits and branch network, which includes the transfer of 208 million pounds of capital relating to offshore companies.
The operation will increase Abbey's market share in deposits to 10 percent from a current level of about 6 percent.
Prior to the B&B assets buy, Santander also recently acquired other British mortgage lender Alliance & Leicester ALLL.L for some 1.3 billion pounds.
The combined branch network in the UK between Abbey, B&B and A&L will reach 1,286 offices, while the combined client base will be 24 million, Santander said.
Management highlighted the potential for cross-selling of the bank's products through B&B's branches, including credit cards, investment funds and insurance.
Restructuring costs of the operation are seen at 50 million pounds and are related mainly to systems and some relocation of branches where there is overlap with Abbey's offices.
"The restructuring does not refer to branch closures," a Santander executive said, adding that the B&B brand name will be kept in the short-term.
"For B&B customers nothing has changed since Friday," he added.
Santander will take on 1,400 employees as a result of the acquisition and a cost base of between 100 and 150 million pounds.
The remainder of B&B's assets will be nationalised.
Santander management said it has a service agreement in place with the British government for the next 18 months, until it has incorporated all B&Bs branches, which they said will be "a relatively smooth event".
(Reporting by Judy MacInnes; editing by Jon Loades-Carter)
