MSE News: Santander savers given assurances after Spain downgrade

Nationwide e-ISA 2.75% for anything over a quid (includes a 1% bonus until June 2011 though) - Kazza's list here https://forums.moneysavingexpert.com/discussion/401374

only HSBC of the major UK banks and building societies can match Santander's AA status.

The other major high street names of Barclays, Lloyds Banking Group, Nationwide Building Society and Royal Bank of Scotland all have inferior ratings.

Santander operates under a subsidiary model. This means that Santander UK is completely autonomous from its Spanish parent company.

"This structure acts as a firewall to stop problems within one part of the group of spreading to other units in the event of financial difficulties. Also, money raised in the UK stays in the UK."

That is the opposite system to RBS which put sub prime debt together with everything else

Both Santander and Santander UK are heavily involved with the toxic financial products that were at the root of the financial crisis, so this claim appears to be misleading at best: ""both Santander and Santander UK ... focused on retail banking with no exposure to toxic financial products". Both are among the largest residential mortgage lenders and it's defaults on those financial products that led to the cascading failure of others.

Just one example of them being heavily involved in those products and having trouble with mortgage defaults is this:

"In the last year, however, problems clearly began to emerge in Spain, especially for one of the country’s most prolific issuers — Santander. As early as last May, Bloomberg was reporting the following regarding Santander’s broader mortgage-backed Hipotecario issues:

Spanish mortgage defaults are triggering losses for holders of AAA rated bonds sold by Banco Santander SA, the country’s largest lender.

Investors in the highest grade portions of 2.8 billion euros ($4.33 billion) of bonds issued by Santander last year will have to wait about 8 years for the debt to mature, rather than little over a year when the notes were issued, Santander said in a report to investors this month. The maturity was extended because of rules designed to protect the holders against default. Spanish mortgage arrears are at the highest in at least six years after the biggest monthly jump in the jobless rate since the 1993 recession to 9.6 percent.

Fast forward to 2009 and downgrades for the mortgage-backed bond issues persist. In April, S&P downgraded junior portions of three transactions sold by Banco Santander SA as ninety-day arrears on loans packaged in one of the notes, Santander Hipotecario 4, climbed four-fold in the last quarter to 10.3 per cent.

... Meanwhile, Fitch put both Santander’s Hipotecario 3 and 4 issues on a rating watch negative. As Fitch explained:

The RWN reflects the continued deterioration in both transactions due to the pools’ weaker collateral composition as well as the deteriorating Spanish housing market and macro-economic conditions".

Neither mortgage defaults here nor in Spain, Latin America and the other regions where Santander operates will directly affect UK savers who have no more than the £50,000 FSCS guarantee limit with the bank.

Could this article have been written by someone who has researched what it is they are writing about??

What brands are included within Santander?
Santander swallowed up the now defunct Abbey and B&B brands at the start of the 2010. While A&L and Cahoot still retain their brand names they are part of the Spanish giant, though A&L will be rebranded later this year.

Not true. Santander have retained the "Abbey" brand for introduced business, as this holds more weight with brokers.
This whole article is about how the downgrading of the spanish economy has affected Santander, yet if it was properly researched he would see that the Santander model is much too diverse to be affected by a localised economy.