Hopefully the offshore banking services will not choose to incorporate each other’s name into a conglomerated quadruply named banking institution, as such a title would become rather unwieldy if not in acronym form.
In the continuing shakeup of the British, European and global banking sectors, Alliance and Leicester is set to take over Bradford and Bingley, which will mean one less offshore banking institution for investors to enjoy; though the services have been running with the same rates and services for a while.
Both banking services have already been incorporated into the Santander portfolio, which has, throughout the economic crisis, been making numerous strategic acquisitions in the UK and elsewhere. Spanish-owned Santander is now the largest bank in the Eurozone, and has been studied as being the most stable, as well. Incorporating banks or building societies with rather difficult balance sheets will likely be positive for most clients, though of course the degradation of competition could be negative in the long run, especially with potential future management changes that have no intention of maintaining the practices of previous administrations.
In the short term, practical level, investors will have little reason to worry about the merger, though if any investors have substantial holdings in both, it might be an issue; the amounts are guaranteed up to 50,000 Pounds per bank, which means if a client has 50,000 in each, the guarantee still only covers 50,000 total; though of course, Santander’s guarantee claims to cover the rest.
What this means for the broader UK banking sector could be significant. In recent years a number of building societies have been absorbed into larger organizations, including Santander, which has emblazoned its fiery red logo on everything in sight. Several mid-sized and small banks or building societies have thus disappeared for one reason or another, continuing as little more than a subsidiary of a larger, foreign, multi-national bank. Although this is not a reason for inherent worry, the dual disappearance of small banks and building societies in particular will mean more money is tied up in banks that have already been deemed by legislative bodies as too big to fail; these banks are now even larger, and will have even more reason to expect further bailouts in the future. It also means corporate driven profit plans, as opposed to building society community development, as well as the general decline of customer service that larger operations generally care. Generally is the key word here; size is not an inherent cause of difficulty, and plenty of behemoth-sized institutions operate with what appears to be a streamlined operating system quite well. But many Britons as well as other citizens may be dismayed at the gradual, inevitable evolution toward such a system that has enormous corporations controlling one’s bank account at all times.
Santander has, thus far, avoided the criticism of similar large banking institutions, especially those in the United States, of taking advantage of such a position to monopolize or legislate in its favor, though of course it remains to be seen how these factors will play out in the long run.
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