Spanish banking giant Santander looks set to acquire Alliance & Leicester after making a successful bid for the lender, in a move that may have significant consequences for borrowers. Santander, who paid £9.5 billion for Abbey in 2004, has reached an agreement to buy Alliance & Leicester for £1.26 billion in a deal that will expand its share of the mortgage market to around 14 per cent, making it Britain's second largest lender behind Halifax. Commentators have suggested that this takeover will inject some much-needed confidence into the British banking sector, as well as securing the future of a lender badly hit by the credit crunch.