My take on the Santander rebrand

Posted on 28 May 2009 by Ray Boulger

1 comment(s)

The logic of Santander’s announcement to rebrand all their UK branches (Abbey, Alliance & Leicester and Bradford & Bingley) as Santander is obvious and when the integration has been completed will have clear benefits for those with a current and/or savings account with any of these brands as they will have access to a larger branch network. In particular Bradford & Bingley has a northern branch bias but Abbey a southern one and thus the geographical coverage will be much improved.

The group’s best savings rates are very similar in its three High Street brands and so there will be little reduction in real competition there but the current account propositions are very different. If Santander doesn’t want to lose market share in the important current account market it will be wise to continue offering both the Abbey and the Alliance & Leicester current account propositions, albeit rebranded Santander and with each current account being given a different name for marketing purposes. If it fails to do this there will be a regrettable reduction of competition in the current account market.

Santander’s already significant international coverage, which it no doubt plans to expand, will allow it to adopt a similar policy to HSBC and more easily market its overseas services to its UK customers and its UK services to customers in Spain and elsewhere.

Santander said that it would be retaining its specialist brands such as cahoot, Cater Allen, James Hay, Abbey for Intermediaries and the international divisions of Abbey, Alliance & Leicester and Bradford & Bingley. Although it makes good sense to retain some of these very well respected specialist brands I would have thought the logic for integrating its UK branches under the Santander brand would have applied equally to the international divisions of those brands.

In its press release Santander said that "one of the key drivers behind the rebrand is the switch to Santander's global IT platform, Partenon." I can only conclude that the IT benefits of amalgamating the UK branches don’t apply to the international divisions, but would expect these all to trade under the Santander name in due course.

Assuming its global IT platform covers mortgages it would also seem obvious that the same logic would apply to intermediary mortgage sales, at least of mainstream mortgages (which in any case is all Santander currently offers), but mortgages sold through intermediaries will continue to be branded Abbey or Alliance & Leicester. Abbey has been developing a new IT system for some time and maybe this is a factor.

For a bank with such a large slice of current mortgage lending as Santander it certainly makes sense to have more than one mortgage brand as it allows extra flexibility. For example if Santander decides to return to the buy to let market in due course it may prefer to do so through a separate brand. Apart from Barclays the top six lender groups in the current market all use at least two brands, although Lloyds Banking Group now has so many mortgage brands it will be culling some of theirs in the near future.

As an intermediary my main concern with these changes is that with Santander retaining its existing mortgage brands it makes it even easier for it to use dual pricing. A lot may well depend on whether competition in the mortgage market has increased significantly by the time of the rebrand, which is due to be finalised by the end of next year. The ideal scenario from a broker perspective, which would also be good for consumers as it would give them maximum choice, would be for Santander to adopt a policy similar to Nationwide and offer Santander branded mainstream mortgages both through their branches and brokers and use the Abbey and/or Alliance & Leicester brands for broker distribution of non mainstream mortgages it may not want to offer through its branches. 

Categories: Buy to let, Mortgages, Miscellaneous

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