Abbey struggles in mortgage market.

BANKING giant Abbey National says its share of the UK mortgage market fell by more than a quarter as borrowers went elsewhere.

Abbey's share of the net lending market -- which strips out repayments -- fell to 4. 4% in the third quarter from 6. 1% at the end of the July.

It came as the bank said disruption caused by a planned takeover by Spanish bank Santander Central Hispano (SCH) had restricted its progress in recent months.

In Abbey's last set of results as an independent bank, it told investors that pre-tax profits for the three months to September 30 were running ahead of the first half.

The value of net mortgage lending in the quarter slumped to pounds 400m from pounds 1. 1bn, while gross lending was up by pounds 100m to pounds 6. 4bn.

The trading statement -- which did not give actual profit figures -- came days after shareholders in SCH voted to approve the pounds 9bn takeover of Abbey.

The tie-up, which will create the fourth largest bank in Europe and the eighth largest in the world, now only needs the backing of regulators.

At the time of its interim results in July, Abbey reported short-term disruption from its transformation programme.

During the quarter, Abbey's rebranded personal finance services business delivered better results after an improvement in trading income. Results were also boosted by increased pre-tax profits at the portfolio business unit.