Spain Takes Over

Spaniard Rafael Nadal is just coming off historic wins at Wimbledon and Roland Garros.  The Spanish national soccer team won the European Championship at the end of June, decisively defeating stalwart Russia and then hosing host-country Germany in the final.  Spain is the current world basketball champion, having defeated Greece in 2006, and the world’s undisputed best chef, Ferran Adrià, calls Spain home.  Spain’s economy is steamrolling the rest of Europe’s, having passed Italy in per-capita GDP in 2006, and is on course to overtake France and Germany in that measure in the next 5 years.

The Spanish are bouyed by tourism, a housing boom, population growth from immigration, a strong fashion/retail sector, and banking.  In fact, I used to work for Spanish banking giant BBVA, which has a massive footprint in fast-growing Latin America.  BBVA bought a large bank in the southern U.S., Compass Bancshares, just last year.

BBVA’s chief rival is Santander, a group that has also made significant inroads in Latin America, but has bought into U.K. banks instead of the American ones.

Santander bought British banking giant Abbey National for £9.5 billion in 2004, and today, they’ve announced that they’re buying British retail bank Alliance & Leicester for £2.6 billion;a 50% discount from A&L’s market value in February of this year. Talk about a steal.

This acquisition will give Santander another 8% of the banking market in the U.K., and allow for a combination of Abbey and Alliance & Leicester to realize real cost savings, making this acquisition even more worthwhile for Santander.