Spanish growth in Scotland on Alex Salmond agenda

Published on 12/09/2010 21:22

First Minister Alex Salmond yesterday met executives of Spain's two biggest financial institutions to discuss further expansion in Scotland, including a possible acquisition of assets put up for sale by Lloyds Banking Group.

• Alex Salmond: "This is speculative, but an opportunity to put Scotland on the radar." Pic: PA

Salmond held talks with Alfredo Saenz Abad, chief executive of Banco Santander, and Carlos Torres, director of strategic development at Banco Bilbao Vizcaya Argentaria (BBVA) while on a visit to the Basque Country region of Spain.

Salmond was in Bilbao to hear an announcement by ScottishPower owner Iberdrola that it is to invest 3 billion in Scottish green energy projects over the next three years. He told reporters that he wanted to forge stronger links between Scotland and the Basque region of Spain, where leaders have a degree of fiscal autonomy - and a lower corporate tax rate than the rest of Spain.

The First Minister, speaking at Iberdrola's new headquarters, admitted he would discuss the divestments due to be made by Lloyds Banking Group to meet conditions demanded last November by European regulators in a government-brokered bail out.

These include the sale of the TSB brand, the Lloyds TSB Scotland branch network and banking licence, and the branches, savings and mortgage accounts of Cheltenham & Gloucester. These conditions amount to a 4.6 per cent share of the personal current accounts market in the UK and up to 19 per cent of the group's mortgage assets.

Lloyds confirmed yesterday that as part of that process the majority of branches, products and services currently branded Lloyds TSB will operate under the Lloyds Bank brand by the end of 2013. There is no change to Bank of Scotland or Halifax, the group's other high street brands. Lloyds previously confirmed that its branches in Scotland will operate solely under the Bank of Scotland name.

"The Lloyds Banking Group divestments are very likely to crop up in conversation," said the First Minister ahead of the meeting, adding that he would also talk to BBVA - the seventh largest bank in the world - about the possibility of investing in Scotland's renewable energy sector.

"Both of these banks have strong expansion plans for the UK," said Salmond, adding that BBVA was actively "looking for opportunities" in Scotland."This is all speculative, but a good opportunity to put Scotland on the radar."

He later said he had tackled Santander over the possibility of creating back office operations in Scotland to support the 318 former Royal Bank of Scotland branches in England and Wales that it bought in a 1.65bn deal.

"I was delighted to meet with Santander which is a bank currently undergoing expansion and made the case for Scotland as a possible base for future operations," he said.

"Santander will have a retail network which is concentrated very heavily south of the Border and that imbalance is not something they are likely to want to see continue over a period of time, especially as they are now a major player in UK banking."