(by M. Riley)

The Consumers’ Association is going to call for a Competition Commission investigation in case HBOS make a counterbid for Abbey National as UK mortgage and savings markets can get impact controlling 34% of the mortgage market and nearly 25% of the savings market.

HBOS is going to disrupt the £8.35 billion takeover offer with Santander Central Hispano (SCH) by means of a counter-offer for Abbey. Still, SCH says it is not going to give way to it.

“If HBOS were to bid we would expect a competition investigation to look at the share they would have in mortgages and savings,” said Mr McAteer, a principal policy adviser at the Consumers’ Association. He added that concerns about rising interest rates, which can lead to competition in mortgages fall as the UK banks would concentrate less on offering special deals in the mortgage market to focus on savings.

HBOS said the UK mortgage market is one of the world’s most competitive; it has about 100 lenders and consumers that are eager to switch mortgage provider.

SCH insists its offer won’t decrease, though it is quite possible in case its offer for Abbey is not completed by March 31, 2005, analysts say. The SCH bid fixed Abbey’s price at £5.65. Abbey stocks closed at 589¼ pounds on Tuesday.