HBOS likes the ring of Abbey

BANKING group HBOS is considering keeping alive the Abbey brand if it makes a successful £9bn-plus counterbid for the High Street lender.

Analysts had expected Abbey National's main mortgage rival to consign 150 years of history to the dustbin and close the bulk of its 750 branches to wring out savings.

But HBOS has become a fan of 'multi-branding' since its successful creation in 2001. Abbey would sit alongside Halifax, Bank of Scotland and Birmingham Midshires.

However, some of the least-used branches from each could be closed.

Meanwhile, Santander is preparing to win over Abbey customers with a campaign to highlight what it regards as 'superior customer service.

Shareholders should receive details of its £8.7bn bid in a weighty mailing next week - just as HBOS decides whether to enter the fray.

Analysts at Smith Barney rate Santander's chance of success at 60%.

HBOS has the support of its biggest shareholders, who would be concerned only if a deal diluted earnings.

The bank will argue to the Office of Fair Trading that a 34% combined HBOS-Abbey mortgage market share should not raise competition fears. Some 70% of its mortgages are sold through intermediaries.

But few in the City believe the creation of a British banking giant with 40m customers would not be referred to the Competition Commission for a lengthy inquiry.