Abbey, Alliance & Leicester and Bradford & Bingley are all to be subject to a major brand change.

The next time you get the Abbey habit, it will be called the Santander habit instead.

Doesn’t really flow, does it? Then again, it does make sense.

British banks have made such a pig’s ear of things, whereas Spanish banks have come out of the banking crisis so well that you can see why it will be good for a bank to remind its customers of its Spanish origins.

So, customers in any one of those three banks will now be able to enjoy all the benefits of banking with a larger network. If there’s no Abbey near by, but there is an Alliance & Leicester, then that’s fine.

It’s just that they will all be called Santander, so after a while, customers won’t see it like that.

The Santander flame has already made an appearance on the Abbey logo.

How many millions did Abbey spend on building its brand over the years? Well, it seems going forward, that will count for nothing.

The Spanish government has been held up as an example of what you should do in terms of regulating banks. As banks became more exposed to the property market, and as bigger mortgages were supplied, the Spanish government made it a condition that banks maintain higher capital ratios. This was the opposite of the approach in the UK, where Northern Rock lent out mortgages of 120 per cent of a property’s value while seeing its capital ratio fall. Given the way the Spanish property market has collapsed, the strength of the nation’s banks is quite impressive.

So it seems Santander, which now boasts the second biggest branch network in the world, after HSBC, is benefiting from a more prudent approach during the boom.

And yet, there is a potential cloud on the horizon. Santander is badly exposed to Latin America. If the economies over there go belly up, then Santander’s belly may … well, let’s just see what happens.

© Investment & Business News 2013