THE City watchdog yesterday approved the £9bn takeover of Abbey National by Spanish bank Santander Central Hispano.

The Financial Services Authority (FSA) said it had no objections to the takeover following an examination lasting more than a month.

The move was seen as a formality after the FSA said last month that it saw no material impediments to the takeover, which is due to be completed on Friday.

The FSA decides if the interests of consumers will be threatened when there is a change of control at a listed company in the UK.

It must also decide whether the buyer is fit and proper to run the enlarged company, weighing up factors such as its business strategy and cash reserves.

The spotlight will now fall on the High Court in the UK, which is expected to sanction the takeover next week.

Shareholders of both banks have already given their approval and the deal has been given the go-ahead by the European Commission.

The takeover will create the fourth largest bank in Europe and the eighth largest in the world.