Santander have brought Alliance and Leicester for £1.26bn, less than half the UK lender's value at the end of last year. The banks had held talks about a possible deal last December when Santander was prepared to pay nearly 700p a share for the bank. Since then Alliance and Leicester's share price has dropped due to recent market turmoil. Santander will combine Alliance and Leicester with Abbey which it purchased in 2004. It also plans to inject £1bn of capital into Alliance and Leicester to cover rising bad debts and further treasury write downs.