Sports Calendar

The Spanish have identified 28 specific cost-saving initiatives, the biggest of which will be job losses of 3,000. But a large number revolve around the introduction of Santander’s technology platform, which is known internally as Partenon. This platform, or versions of it, is also being rolled out in its other international operations in Latin America and Portugal.

This has already enabled Santander to reduce its cost base in its domestic market. It has meant that the bank has been able to focus its branch network on servicing the customer and this will be the big transformation that will be seen at Abbey.

One of the most visible changes will be the opening of more smaller branches, which will help to reduce Abbey’s historical dependence on independent financial advisers.

Alberto Vilalta, Santander’s deputy general manager of retail, said: “By Spanish standards, the Abbey network is small. In Spain we have more than 4,000 branches, but an analysis of the British market will have to be done before we decide how many will be opened.”

He added: “Branches bring you a lot of barriers to entry and build the customer relationship strongly. Our branches are quite small; our average branch has five or six staff, and we do have branches with just two people”. The average number of people in an Abbey branch is 16, with a higher percentage in back office.

Other banks, such as HBOS, have already made substantial cuts in branch back-office functions but Vilalta believes Santander has the advantage of international scale. He said: “At the end, it’s a factory approach.”

Santander will invest a lot of capital in refurbishing Abbey’s branches. In Spain it has a formulaic layout that is replicated throughout its network. In most cases each staff member is given the same workload. In Madrid, Martinez is responsible for 100 customers; the assistant manager has 40 customers but has a broader management role as well. Customer advisers each look after 200 individuals and company advisers look after 100 companies. Each person knows what profits they are producing for the company.

Analysts say the biggest benefit that Santander can bring to Abbey is its balance sheet. This will help the British bank to launch a number of competitive products designed to grow its customer base.

In Spain, Santander is currently promoting a mortgage deal which, if taken up by clients, offers them a cheap loan for a large television.

At Banesto, the bank is about to launch an offer to encourage customers to place their payroll with them. The last campaign gave new clients a DVD player plus 50 films.

JUST a 20-minute drive north from the centre of Madrid, a huge sprawling complex is being built on 150 hectares. The imposing entrance looks like a gateway to a giant film studio, but this is no tourist destination — this is Santander Group City, its global headquarters. It is here that Botin, who has a circular top-floor office, intends to oversee his empire. It leaves the visitor with the impression that buying Abbey, however big it may be, is just another deal on Botin’s path to global domination.

Botin is a man who is comfortable juggling numbers. The fees associated with buying Abbey come to €75m (Abbey’s costs are €90m). These sums exclude the pay-offs to directors. Arnold, who will stay at Abbey until June, is in line for £1.6m (excluding share options).