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For years Alliance & Leicester has appeared a sitting duck of a takeover target. Like its rivals, its share price has plummeted in the last year falling from about £11 to its current price of about £3.

That makes it an even more tempting prospect for anyone wanting to build in the UK banking sector.

If Santander's bid is successful it will be greeted with a huge sigh of relief from the FSA headquarters in London's Canary Wharf.

Okay, the offer worth about £2.99 a share, looks like a fire-sale price. But in this rough financial climate it will bring added security to the market, particularly with the financial muscle offered by Santander, something its executives are always so gleefully talking about.

It has a strong balance sheet and, thanks to its takeover of Abbey, now has a track record of riding to the rescue of struggling UK banks.

Not that A&L is particularly flagging, it is just that in recent years its mortgage lending seems to have lost its way. It remains ninth largest in terms of outstanding loans and gross lending. But seriously, how many advisers can actually admit A&L has been on their radar in the last year?

Alliance & Leicester's products have been a long way from the top of the market.

Okay, I acknowledge that its lending model was not ready for the credit squeeze but it also has a sizeable number of savers. There are 5.5m customer accounts and 92,000 business accounts.

As far as rates go, A&L's current account has been top of the pile in recent years and the bank also offers an attractive overdraft. The current account certainly brought in a steady stream of new customers, despite a number of bad headlines when customers were reclaiming bank charges.

In many ways, this makes it a perfect match for a giant such as Santander. It wants to broaden its current account base and get more of a foothold with savers. It would consolidate its position as Britain's second largest lender, pushing closer to Halifax.

Abbey was not the perfect business when Santander took it on, far from it. Getting Abbey on the right track has proved a frustrating and slow process with forward-thinking Santander bosses having to combat the notions of managers leftover from the Luqman Arnold and even the lender's mutual days.

In many respects, there will be the same problems at Alliance & Leicester. Like Abbey used to, Alliance & Leicester's bosses seem incredulous when flaws in service or products are raised.

However, having watched Northern Rock collapse and RBS, Natwest, HBoS and Bradford & Bingley go cap in hand to shareholders, the FSA will be overjoyed that a bit of stability can be brought back to one of the UK's smaller players.

More pertinently, Santander obviously thinks the UK mortgage market is still viable. As most mortgage advisers know, you do not have to look much further than its current range of products in order to find the best on the market.

Margins may have been squeezed, inter-bank lending confidence has deteriorated and house prices are tumbling but by taking on Alliance & Leicester's book, Santander is clearly looking to the long-term.

You can look but you cannot touch

It did not take long after Northern Rock's tempting new rates came out for murmurs of discontent to start sounding. The problem is the slightly farcical situation that existing borrowers coming to the end of deals now find themselves in. That is, they are not allowed to move on to the Rock's latest deals.

It does not matter how good their repayment history, how much equity they have or how massive their income is. Northern Rock does not want its current type of borrower in their new mortgage book. Okay, the Rock is trying to reduce its book. But it is obviously taking on some new borrowers. However, the new management clearly has so little faith in the business done by its predecessors that none of the existing customers will be considered, whoever they are. The hypocrisy is it clearly expects other lenders to take a risk it will not.

You should have known better

There are some complaints I just will not take on and usually they involve businesses. I got an email from someone the other day who had taken out a £300,000 commercial mortgage for his guest house last year at 13.5 per cent.

A broker had just told him he could do better and pay about 6.5 per cent. The thing is, when he asked for a redemption statement he was told there would be a £16,000 early repayment charge and £96,000 pre-payment interest.

He complained to me. The trouble is he is a businessman. And if this person was too foolish not to check the small print or other products when he took out the loan, then I am not sure he should be running a business at all.