The Competition and Markets Authority (CMA) has announced that it is investigating the potential £1.6bn merger between One Savings Bank and Charter Court.

The investigation will assess whether the deal could potentially lead to a “substantial lessening of competition” in the mortgage market. The CMA has invited comments on the merger by June 19.

In March it was announced that OneSavings Bank and Charter Court were proposing a £1.6bn all-share merger, creating one of the biggest specialist lenders in the UK. One Savings Bank operates the Kent Reliance brand, while Charter Court brands include Precise Mortgage. A statement released at the time of the proposed merger said the combined group planned to maintain the two current distribution platforms.