Watchdog plays down Abbey suitor fears

The City watchdog today played down reports that it had concerns about Abbey National suitor Banco Santander Central Hispano.

The Financial Services Authority confirmed that it was investigating the proposed takeover of the bank by the Madrid-based group, but insisted this was a “matter of routine”.

It said in any situation where a group which it regulated had a change of ownership it needed to ensure both that the purchaser was fit and proper, and that the acquisition was in the interests of consumers.

Meanwhile the Sunday Times reported that Santander plans to increase Abbey’s current network of 740 branches if its takeover is successful.

The group is understood to be planning to carry out a review of its branch network as soon as it takes over. It also plans to cut 3,000 jobs from Abbey’s 26,000-strong workforce, though these will mainly be back-office staff.

Santander’s chances of securing Abbey increased last week after the group was given the green light for the deal by the European Commission.

This happened just hours after Halifax to Bank of Scotland group HBOS announced it would not be tabling a rival offer for the group.

For the takeover to go ahead, Santander will now have to gain approval from Abbey shareholders on October 14 and its own a week later.