The huge Spanish bank in the middle of a takeover bid for Abbey National could be eyeing up Bradford & Bingley as its next target, it has been claimed.

Reports from Spain suggest Banco Santander (BSCH) is keen to follow up its £8.6 billion takeover of Abbey with a move for other UK banks.

Spanish newspaper Expansion said that the bank believed it would be able to further expand its presence in the UK because Abbey was a relatively small player in the overall market.

It quoted a source as saying: "There are options open and there will be more opportunities for growth. (BSCH) is buying the sixth largest, not the second or third, and that gives some margin."

Expansion went on to claim that BCSH was eyeing up both Alliance & Leicester and Bradford & Bingley and it believed the move would help it increase synergies in its new UK operation.

Both BSCH and Bradford & Bingley declined to comment on the speculation.

BSCH has grown over the last 15 years by making acquisitions and is known to be ambitious to grow further.

The Abbey deal, which could be completed as early as November, would create one of the world's top ten banks.

BSCH already has a presence in 40 countries and boasts more than 41 million customers.

Bradford & Bingley has been tipped as a takeover target for some time and last week dropped out of the FTSE100 index of the UK's leading companies.

It is in the process of disposing of its non-core estate agency and mortgage businesses which could increase its appeal.

Tony Oxley, portfolio manager at stockbrokers Redmayne-Bentley, said: "Further takeovers would seem likely, especially if they get Abbey.

"It would mean that the synergies can be exaggerated and they can really take some costs out of the business.

"They are not going to do this in the short term because it is going to be a real battle just to get Abbey, but if they do they will start to look somewhere else.

"They have got a lot of cash and UK banks face a terrible time bidding for each other so it would suit a European company. Bradford & Bingley is always in play in these situations."

Meanwhile, BSCH executive vice president Juan Rodriguez has outlined his company's intentions for Abbey in a letter to UK financial intermediaries.

The move puts further pressure on any rival bidder, with the queue thought to be headed by HBOS, if they want to join the race for Abbey.

"Our offer to acquire Abbey is based on our belief that Abbey has a strong franchise, with a leading position in the UK mortgage market and an extensive distribution network," said Mr Rodriguez.

"We believe that in acquiring Abbey we will be preserving and strengthening an independent force in the UK market for mortgage, banking and investment services."