Abbey poised to overtake Halifax as UK’s largest mortgage lender

by Gill Montia

Story link: Abbey poised to overtake Halifax as UK’s largest mortgage lender

Abbey’s share of the UK mortgage market increased to 25% in the first half of 2008, having trebled to 15.9% in the first three months of the year (year-on-year).

While other lenders have been scaling back, Abbey’s Spanish parent company, Santander, has cushioned it from large scale funding difficulties and the bank is now poised to overtake Halifax as the UK’s biggest mortgage lender.

In addition, Abbey’s writedowns from mortgage-backed securities have been minimal and the group expects to post profit of £4.87 billion for the first half of 2008, up from £3.58 billion in the same period in 2007.

Meanwhile, analysts expect HBOS to record a 50% fall in first-half profits to £1.03 billion.

Abbey’s stellar performance is more bad news for HBOS, which was deserted by its small shareholders in its recent £4 billion fundraising and is now rumoured to be an acquisition target for BBVA, Spain’s second largest bank.

The group is also reported to be attempting to raise £300 million from the sale of its Hill Hire subsidiary, although HBOS says the sale is a routine business matter and not aimed at bolstering its balance sheet.