In its third quarter trading statement Santander said its attempt to revive Abbey was on-track but added there was still a way to go before it achieved targets set out at the time of its £8 billion acquisition in November 2004.
Santander announced financial targets for Abbey for 2006-2008 which included a revenue growth of 5 to 10 per cent per annum over three years and revealed plans to enter higher margin segments of the mortgage market, reportedly buy-to-let, new build and non-conforming. These market segments represent a large part of the market Abbey has not previously competed in.
Abbey also plans to ‘grow aggressively’ in areas in which it is currently under-represented including current accounts, pensions, unsecured loans and investments, and to develop opportunities in consumer finance and business banking. However, to achieve its plans to transform Abbey and reduce costs Santander expects 4,000 jobs to be cut by the end of 2005 with more to follow.
Francisco Gomez-Roldan, chief executive officer of Abbey, said:
“ We have great ambitions for the business. We will grow in our core mortgage and savings markets and attack in areas where we have significant opportunities such as current accounts, personal loans and small business banking. Turning Abbey around will take three years but we have made an excellent start.”
Jonathan Cornell, technical director at Hamptons International Mortgages, said: “For a lender the size of Abbey looking to enter non-conforming is brilliant news for borrowers and brokers. The more high-street lenders offering non-conforming, the better name it will get. The industry needs someone to give HBOS a run for its money and Abbey is a great candidate
