Santander has become one of Britain’s biggest high street banks after it bought more than 300 branches from RBS.

The Spanish bank made a £1.65billion deal with RBS to secure 318 prime location branches.

RBS, which is 83 per cent taxpayer owned, was forced to make the sale under EU regulations as part of its attempt to pay back some of the money from its public bail out in 2008.

Santander already owns the former Abbey, Alliance & Leicester and Bradford & Bingley brands in the UK and the new acquisition of branches mean it will have more high street spots than HSBC.

Ina another move to expand its services Santander will be selling life insurance after it made a partnership deal with Aviva.

Santander already sells Aviva’s general insurance products and will add its life insurance, critical illness and income protection policies under a five-year scheme starting next June.

The agreement will give Aviva access to another 25 million customers.

António Horta-Osório, chief executive of Santander UK said:  “This is a very important strategic deal for Santander in the UK that builds on our retail strength and significantly accelerates our plans to have a substantial presence, and continue to challenge, in the SME and corporate banking sector.”

RBS chief executive Stephen Hester said it was an ‘important milestone’ in their restructuring work and that it was a significant part of their recovery plan.

He added: “The bank is becoming stronger, which allows an increased focus on serving ongoing customers and improving commercial success; all a pre-requisite for the profitable realisation of taxpayers’ stake in RBS.”

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