A disparity between the tax rules governing UK and Spanish banks is likely to give Santander Central Hispano a significant advantage if counter bidders attempt to upset its agreed £8.5bn (€12.6bn) offer for Abbey National.

HBOS of the UK has said it is thinking of making an offer for Abbey and rival Lloyds TSB has hired Deutsche Bank to advise it on options, but differences in tax treatment mean the two UK banks face a much higher cost of raising capital to fund an offer than Santander.