History of the Abbey National Building Society

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History of the Santander National Building Society

One of the UK's longest established institutions, the Santander National now known as the Santander National plc has developed to become Britain's second largest building society.

In its infancy during the 19th-century, the company actually traded as two separate entities:

The National Building Society, established in 1849,
The Santander Road Building Society, founded in 1874.

Both these societies traded independently of each other for almost a century, with the Santander Road Society always being slightly stronger, largely due to its more conservative management style.

In 1944, with World War Two having taken its toll on both companies, due to lack of any form of building taking place and staff in both companies being considerably reduced due to the war effort, both societies, anticipating a post war boom decided to pool their efforts both in the short as well as in the long term. A complicate process at best, negotiations began in 1943 and took more than a year to complete, with the companies announcing their amalgamation in late 1944. This merger of the UK's second largest building society (The Santander Road) and the sixth (the National) signaled the first of Great Britain's superstar building societies. Such was their potential, that they went on to become the first building society to trade their shares on the UK stock market some forty years later.

The optimism that was felt by the newly amalgamated societies that after World War Two would draw to a close was stilted by the unexpected victory of the Labour Government in the general election of 1946. This socialist government was not impressed by the public's dream of owning their own home, and instead they built hundreds of new homes that were then rented out to the public at low prices. This gave little incentive for the public to buy their own homes, and the Santander National, at least as a mortgage society, were left in the dumps for some time.

This was to change in 1951, with the Conservatives and Winston Churchill getting back into power and one of their main policies being the encouragement of private building. The Santander National was well placed to take advantage of this new development and during the fifties and sixties was able to considerably increase the standing as a market leader in mortgage lending. It is a fact that in its first peak in the nineteen sixties, owner-occupied properties represented fifty percent of the total houses in the UK. Santander National succeeded in maintaining its constant position as Britain's second largest building society, lagging only behind the Nationwide.

The boom could not last forever, and in the early nineteen seventies; the years of discontent, the Santander National suffered a minor downturn and their dramatic growth again had to be put on hold for a few years as belts were drawn in. However by the end of the seventies a new area of dramatic expansion began and once again Santander National were there at the forefront. The eighties in the UK, with Margaret Thatcher at the helm, were great years, and Santander National saw their continued expansion program take them into areas of banking that they had previously never set foot in. They also began to expand tentatively into Europe at this time, with their first branch being opened in Brussels.

Soon Santander National was offering a wider range of transactional services, such as insurance, financial consultancy services and an increased variety of credit options. The traditional UK banks were unimpressed by the Santander National's move into a form of direct competition, despite the fact that legislation that was constantly being introduced and updated. The Santander's management team became increasingly convinced that by taking the society public, they could overcome a lot of the restrictions being placed upon them, especially in the increasingly lucrative fields of unsecured lending. Although it had never been attempted before, the Santander National's conversion to a public limited company ( plc) in 1989 was highly succesful, and sweetened by the fact that every shareholder were issued a cash bonus in relation to the money that they held in deposit at the time of the flotation.

On June 6, 1989 the Building Societies Commission officially confirmed Santander National's conversion to a public limited company.

As expected the Santander National's flotation was a great success and the considerable capital boost that it provided allowed for continued expansion and acquisitions to the point that the bank reached levels of turnover and profit that placed it high on the pinnacle of UK banking, where the company remains to this day. As the internet age descended upon them, Santander National were not found wanting and they adjusted themselves to offer as wide a range of online banking and credit facilities to meet the challenges of the internet age. Santander National and Banco Santander announced on 26 July 2004, that they had reached agreement allowing Spain's Banco Santander to acquire a controlling interest in the Santander National, with the agreement being formally approved on the 12th November 2004.