Mortgage lenders 'unconcerned' by HBOS bid for Abbey

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The Independent Online

Anne Gunther, the chief executive of Standard Life Bank and chairwoman of the Council of Mortgage Lenders (CML), the mortgage industry's main trade body, has said she does not believe an acquisition of Abbey National by HBOS would have a detrimental effect on levels of competition in the UK market.

Anne Gunther, the chief executive of Standard Life Bank and chairwoman of the Council of Mortgage Lenders (CML), the mortgage industry's main trade body, has said she does not believe an acquisition of Abbey National by HBOS would have a detrimental effect on levels of competition in the UK market.

Talking to The Independent yesterday, Ms Gunther said that while she believed any inquiry by UK competition authorities would be "finely balanced", her own belief was that the combined company's 35 per cent share of the mortgage market would not seriously affect the market's dynamics.

HBOS has yet to make a formal bid for Abbey, but is widely expected to enter the auction next month, once Santander Central Hispano (SCH), the only current bidder, has published its offer document. Further confirmation of HBOS's intention to bid came earlier this week when it was granted access to Abbey's "data room", where potential bidders can study its books in detail ahead of a potential offer.

An approach by HBOS - or Lloyds TSB, which is also expected to bid - is almost certain to be referred by the Office of Fair Trading to UK competition authorities. The CML is likely to be one of the principal parties consulted by the Competition Commission when considering whether or not to block the bid.

Competition authorities blocked a bid for Abbey from Lloyds TSB more than three years ago.

"One would think that the previous decision needs to be tested, and various shareholders would say something if it wasn't," Ms Gunther said. "There are a lot of big players with £50bn or more of mortgage assets under management, so there is a lot of competition. Things have definitely changed since the Lloyds bid for Abbey."

Ms Gunther added that it would not just be the mortgage market that needed to be considered, with both groups operating in a range of common markets, such as current accounts, personal loans, life insurance and savings products.

Meanwhile, SCH issued a statement yesterday scotching rumours that it would drop out of the bidding if rival bids from UK companies were referred to the competition authorities. Reports in the UK press at the weekend had suggested that SCH would pull out if a competition inquiry was announced.

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