Santander may shore up A&L with extra £1bn- Morningstar

Morningstar fund analyst Erin Davis believe deleveraging A&L will also be a major priority for Santander. In an all-share deal worth £1.25bn, Alliance & Leicester agreed yesterday to become part of Santander’s Abbey Brand. However, Davis believes Santander will contribute a significant amount of additional capital as part of the deal. “The deal is not without risk to Santander, which will add £1bn of its capital to A&L's balance sheet in order to shore up its finances,” says Davis. With falling property prices and rising arrears and repossessions, Santander is also at risk from losses...