Abbey Becomes Biggest Mortgage Lender

Abbey has replaced HBOS as Britain's biggest mortgage lender, new figures have revealed.

The firm, which operates as part of the Spanish-owned Santander business group, issued around one third of new home loans over the second quarter - allowing it to take top spot. Its total market share currently stands at 26 percent.

Abbey has been less badly-hit by the credit crunch than many of its rivals, and has been able to pick up more new business as a result. In marked contrast to the crisis-induced losses announced by most UK financial firms, it also declared a healthy £485 million profit for the first half of the year.

The firm's market share is also set to be boosted further with Santander's £1.25 billion takeover of rival lender Alliance & Leicester (A&L), which was announced earlier this month. If the deal goes through and both firm's branches are merged, Abbey will gain 959 extra outlets and a further eight per cent of the mortgage market.

Alliance & Leicester has been hit hard by the credit crunch, and was vulnerable to a takeover as a result.

Santander chief executive Alfredo Saenz said that he was "very happy" about the deal. "If the offer is successful, we'll be facing an integration period ahead," he added.