UK retail bank Abbey National is back in the black this year after a massive restructuring by new Spanish owners Banco Santander.
Abbey made a pre-tax profit of GBP596 million in 2005, compared to a GBP21 million loss for the previous year. Banco Santander bought Abbey in 2004 for GBP9.5 billion. The bank said that the improvement came from strong growth in retail banking fee income and an increased contribution from Abbey Financial Markets.
Abbey said that its Bank and Save campaign led to 34,000 people switching their bank accounts, double the number of switchers last year. A cost reduction program was another major boost to the bottom line, as Abbey reduced its costs by GBP224 million, well ahead of the original target of GBP100 million.
As part of the drive to save money, 4,000 jobs have so far been cut across the business during the year. According to a report in The Scotsman, Banco Santander plans to push ahead with further reductions and may cut up to 2,000 more jobs in 2006. The chief executive of Abbey Francisco Gomez Roldan did not specify where in the business the jobs would be cut.