Santander soothes unions' fears over Abbey jobs

The chairman of Santander Central Hispano, the Spanish bank which is bidding for Abbey National, will tell unions today that a successful acquisition by his company will result in less than half the number of job cuts than would be made in the event of an HBOS takeover.

The chairman of Santander Central Hispano, the Spanish bank which is bidding for Abbey National, will tell unions today that a successful acquisition by his company will result in less than half the number of job cuts than would be made in the event of an HBOS takeover.

Emilio Botin will make the claims at a meeting with Abbey National Group Union today, in an attempt to win greater support for the Spanish bid.

Reports at the weekend suggested that HBOS, which is Britain's fifth-largest bank, would be likely to cut up to 9,000 jobs if it made a successful bid for Abbey, thanks to the fact that 70 per cent of Abbey's branches are within half a mile of a Halifax or Bank of Scotland outlet. However, Mr Botin will say that SCH would not expect to cut many more than 3,000 jobs.

While the SCH bid remains the only formal offer for Abbey so far, it is widely expected that HBOS and Lloyds TSB will lay down their own bids once the Spanish bank has published its offer document for Abbey next month.

SCH is desperately trying to persuade shareholders to accept its bid without considering any UK offers, which will inevitably be subject to the result of a lengthy consultation by the Competition Committee.

With SCH's offer scheduled to expire on 31 March next year, sources close to the bank believe that it is unlikely a renewed bid would be made if the deal had still not be finalised by then. SCH is believed to be concerned at the departure of the company's long-standing finance director, Stephen Hester, who has been appointed as the new chief executive of British Land.

However, many Abbey investors are thought to favour a sale to a British bank, which would be better placed to make savings from a takeover.

On top of that SCH's offer of cash plus shares is putting off some shareholders. Some institutional investors, such as UK fund managers, would be unable to hold euro-denominated shares in their portfolios.

Private investors, some of whom have held Abbey stock since it demutualised in 1989, would be reluctant to hold Madrid-issued paper. However, SCH has indicated that it might be willing to seek a dual listing in London that would allow investors to hold sterling-denominated shares in the merged company.