The last attempt to take over Abbey was made by Lloyds TSB

Earlier, the UK's second biggest mortgage provider had said it was in talks with a potential bidder but declined to name the suitor.

In a statement to the stock exchange, Abbey said it had noted recent speculation concerning its share price.

The news provided a boost to Abbey, pushing its shares up 16%, or 78 pence, to 571p in late trade.

But in a statement SCH said it was impossible to say whether those talks would result in an offer for Abbey.

Disastrous

Speculation that the Spanish group had approached Abbey emerged in May.

They claimed the bank had submitted a "serious" offer to Abbey but both parties denied the claims.

ABBEY FACTS & FIGURES Number of branches: 741 Number of Cash machines: 2,799 Number of customers: more than 16 million across the group Total value of assets: �205bn at the end of 2002 The bank was created following the merger of Abbey Road Building Society and the National Building Society in 1944 The group demutualised on 12 July 1989 Abbey shares were worth �1.30 on conversion Name changed from Abbey National to Abbey in September 2003 Check Abbey's latest share price

The group has been struggling to return to profit over the last two years - following a disastrous foray into corporate banking - triggering rumours that it was ripe for a takeover approach.

The approach from SCH is not the first that Abbey has seen - back in 2001, Lloyds TSB attempted an �18bn bid for Abbey which was eventually blocked on competition grounds.

Recently Abbey has tried to revive its fortunes after struggling to return to profits over the last two years - following a disastrous foray into corporate banking - triggering rumours that it was ripe for a takeover approach.

The group drafted in Luqman Arnold as chief executive who set out a three year shake-up plan that would see it either wind down its non-core business activities or sell them off.

Such a move would allow the firm to concentrate on its personal finance activities.

In April, Abbey said it was on track to return to profit this year after posting a loss of �686m in 2003.

The forecast came despite the firm revealing that first-quarter profits and margins at its core personal finance services were lower than last year.