Santander to Expand Its Share of the UK Mortgage Market

Santander Group, a Spanish banking group that owns Abbey, Bradford & Bingley, and Alliance & Leicester, recently announced that it plans to expand its share of the UK mortgage market. According to the announcement made by Santander, in January 2010, the lender will introduce a market leading offer – Zero Account, on which the group has been working for several months. Zero Account that is to be introduced next year is a “free” current account, which has no overdraft charges and no fees for access to foreign ATMs. The no-fee account will be the first banking product offered by Abbey upon its rebranding. Let us remind that on January 11th, Abbey is set to be renamed into Santander. The move of the Santander Group is aimed not only at expanding its share of the British mortgage market, but also at differentiating itself from other UK lenders. According to Mr. Antonio Horta-Osorio, chief executive of the UK division of the Santander Group, the lender plans to change its business strategy and to cooperate more actively with customers. He added that the major principle of future Santander’s business approach will be simplicity and benefits to existing customers. Mr. Horta-Osorio’s statement perfectly reflects the terms on which the Zero Account will be available. Only existing mortgage borrowers of the Santander Group will be eligible to apply for the no-fee account, the terms of which are, in fact, the best available on the UK market. At the moment, there are approximately 2 million mortgage holders at Santander, and another 0.5 million at Alliance & Leicester, which will be renamed into Santander in autumn 2010. Evidently, the launch of such a competitive offer as the Zero Account is designed to attract more mortgage borrowers, which will eventually result in the expansion of Santander’s share of the UK mortgage market. The trend that Santander followed is not new as a lot of other UK lenders introduced attractive deals to existing customers earlier in an effort to persuade borrowers of other lenders to make the switch.