Business View : Where is Abbey's conquistador going to venture next?

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The Independent Online

Buenos dias, Senor Francisco Gomez-Roldan. And welcome to Abbey National. The roaring of the traffic on the Euston Road may not be too welcoming to someone used to the beautiful beaches of Santander or the wide boulevards of Madrid. The weather may be awful. And not eating dinner in the middle of the night might be hard to get used to. But at least your HQ is a lovely new office.

When your boss, the estimable Emilio Botin, told you that you'd be taking charge of Abbey, it was probably a surprise. It certainly caught a few people in London on the hop. Posting the group finance director to oversee the integration of an £8bn acquisition either means that Banco Santander Central Hispano means business. Or that it is worried.

This is an important deal for Santander. But it is equally important for the UK banking market. Francisco, everyone expects you to fail. Not miserably, but in a "never really made a difference" kind of way, leaving you with a declining asset you won't be able to offload which will be a drag to you for years to come.

For a start, Abbey is subscale in almost everything but mortgages. That business, though, does not look terribly attractive, with the end of the housing boom coinciding with a period of little movement in interest rates.

Then you need to update Abbey's computer systems. Sure, you have a grand plan - bringing over the superb system from Banesto, one of your subsidiaries. But you are already migrating the Banco Santander systems to the Banesto platform. One big systems change is enough for anyone. Two at once is pretty ambitious.

This time next year we should know if this is going well or whether you have caught a crab. By then you will have to address the $64,000 - or should we say the £4bn - question. Is Abbey big enough to take on the big five banks?

The close followers of Santander in Madrid seem to know the answer. It is no. To make an impact on the UK market with your innovative techniques and responsible delivery you will need to have at least a 10 per cent market share on average to start off with. And you ain't going to get that any time soon organically with Abbey.

So what to buy? It depends on what is on sale. Alliance & Leicester, Northern Rock and Bradford & Bingley are all public companies and so can be prized with a good bid. But Alliance would be expensive, Northern is a bit regional and the B&B has a bit of an identity crisis (though this could provide an opportunity). The troubled National Australia Bank will surely sell the Clydesdale and Yorkshire at some point. But will the timing be right?

Mr Botin reportedly ended a presentation to investors at Goldman Sachs with the comment: "See you in another acquisition."

This could be a witty joke. But then, with Mr Botin you never really know. Do you, Francisco?

Boots takes some Viagra

Sex sells. Or that must be what Boots' boss Richard Baker must be hoping after ditching dentistry and massage in favour of "tasteful" sex toys from the makers of Durex condoms. Boots says it has not yet decided whether to stock the Play range, but if it does it will be an attempt to tap into the supposedly growing Sex and the City market.

While this will be a brave idea, it is hardly new. Marks & Spencer struck a deal with Agent Provocateur to add some spice to its underwear offer a few years ago. While Salon Rose, as it is called, can still be found in larger stores, it is far less important now that Stuart Rose is pursuing a back-to-basics strategy.

But if the new kinky Boots idea is a success, why not try it for other troubled retailers? Hardcore videos at WH Smith, edible underwear at J Sainsbury, and the mind boggles at what they could sell in a flatpack at MFI. The high street may never be the same again.

j.nisse@independent.co.uk

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