SPECULATION of a rival bid for HBoS was mounting today as the Government gave the Lloyds TSB planned merger the green light despite competition fears.
Business Secretary Peter Mandelson last night said the public interest of "preserving the stability of the financial system" outweighed any potential anti-competitive effects, over-ruling concerns raised by the office of Fair Trading about the merger
plan.
But today it was reported a major European bank may put forward its own bid for HBoS next week.
It is reported that the unnamed bank has approached the UK government to ask how to proceed.
And Jim Spowart, the founder of Standard Life Bank and Intelligent Finance who has been campaigning for an alternative to the Lloyds merger, said a rival bid could be on the cards. He said: "I believe there is a chance. That's all I can say at this stage."
The decision to overrule the OFT follows a political outcry at announcements that only two of the executives on the main board of the merged bank would be from Scotland.
The OFT said in a report submitted to the Secretary of State that the banking tie-up risked lessening competition in personal current accounts, banking services for small businesses and the mortgage market.
Lord Mandelson said: "I am satisfied that the public interest is best served by allowing this merger to proceed without reference to the Competition Commission."
HBoS said it welcomed last night's decision by the Secretary of State, saying it was a "major milestone" in the deal.
But First Minister Alex Salmond said: "The OFT report quite clearly shows that as well as concerns about jobs and decision-making, there are also major questions about a substantial loss of competition for individuals and businesses in Scotland."
The full article contains 303 words and appears in Edinburgh Evening News newspaper.
