break bank

Abbey (bank)

Abbey, formerly Abbey National, is one of the largest banks in the United Kingdom. Abbey's registered office is in London (built on the site of the former Thames Television studios in Euston Road) and its main corporate centre is in Milton Keynes. Its savings and banking administration departments are both in Bradford, with a mortgage centre in Thornaby-on-Tees (which is rumoured to be under threat of closure ). Abbey currently has Banking Contact Centres in Sheffield, Basildon, Belfast and Glasgow. Business Banking operations, both administrative and telephony, are also based in Glasgow, having been moved from Taunton and Newport early in 2005.

Abbey previously operated contact centres in Derby, Warrington and Gateshead. The Derby and Warrington centres were closed as part of a cost cutting exercise. Those jobs moved to Bangalore and Pune, India. Following the takeover by Banco Santander, the Gateshead operations also closed in March 2005. However, operations then returned to the UK at a later date


The Abbey Road & St John's Wood Permanent Benefit Building Society was founded in 1874, based in a Baptist church in Kilburn. The society became the Abbey National Building Society following the merger of the Abbey Road Building Society with the National Building Society in 1944.

In 1932 the society moved into new headquarters, Abbey House, at 219 to 229 Baker Street, London, a site occupied until 2002. The site was thought to include 221B Baker Street, the fictional home of Sherlock Holmes.

During the 1970s and 1980s, Abbey National gained a reputation for innovation and, sometimes disruptive, change. It was an early user of computer systems and in the late 1970s, all branches became on-line to a real-time system that maintained customer accounts. Under Chief General Manager Clive Thornton, new types of savings accounts were introduced as well as a cheque account. The administration of the cheque account was restricted by building society rules and the need to find a partner that could clear Abbey's cheques (the Co-operative Bank). Later, Abbey became a full member of the BACS and APACS. Thornton also acted to break the building societies' interest rate cartel.

In 12 July 1989, the Abbey National Building Society de-mutualised and became a public limited company (Abbey National plc), floated on the London Stock Exchange. At flotation, the share price was £1.30. The de-mutualisation process was marred by the discovery of a large number of undelivered share certificates awaiting destruction at a contractor's premises. Abbey was the first of the UK building societies to demutualise, which it did in July 1989, floating at £1.30 per share on the London Stock Exchange. As a result, Abbey National plc had an unusually large number of small shareholders; approximately 1.8 million initially.

Abbey National shares peaked at more than £14 in 2000, before the stock market began a long decline.


In 1994, Abbey National purchased “James Hay” one of the UK’s foremost independent provider of self-administered pensions and is one of the pioneer development of SIPP’s with the launch of the in 1996 of the James Hay SIPP. James Hay then went on to grow in straight and launched Abbey Wrap, the first Wrap a service in which IFA’s can keep the clients ISA’s, Peps, Offshore bonds and SIPP in one place. Abbey Wrap Managers was FSA approved in 2003. This was relaunched as James Hay Wrap in 2006.

Two life assurance companies were demutualised and acquired, Scottish Mutual in 1992 and Scottish Provident in 2001, which enabled Abbey to pursue the bancassurance model.

In August 1996, Abbey National merged with the National & Provincial Building Society, increasing its branch network by almost two hundred branches and bringing in three million more customers.

In April 2000 Abbey bought Porterbrook from Stagecoach Group for £773 million. Porterbrook was one of the three railway rolling stock operating companies created from by the privatization of British Rail, leasing rolling stock to the UK train operating companies.

The bank launched its e-bank, cahoot, in June 2000.

Abbey also ventured into the wholesale loans business. At first this provided a good profit stream, despite the criticisms of some analysts. This eventually undid the company, however, when Enron turned out to be unsafe and the September 11th attacks in New York damaged confidence in various financial areas. From this point, Abbey struggled from financial losses and a tarnished image. The Chief Executive, Ian Harley - a long-time Abbey employee, eventually resigned and his post was filled by an outsider, Luqman Arnold.

Arnold spearheaded a major reorganisation of the bank in September 2003 that also saw the brand name shortened to Abbey and the umbrella logo dropped. Banking literature was also simplified as part of the programme, labelled 'turning banking on its head'. The bank's listing on the London Stock Exchange could not be legally changed to Abbey plc as this had already been registered by an Irish property development company, and the legal name is still Abbey National plc.

Abbey purchased the savings business and branches of Bradford & Bingley in September 2008 following the nationalisation of B&B by HM Government.

Takeover by Banco Santander

On 26 July 2004 Abbey National plc and Banco Santander Central Hispano, SA announced that they had reached agreement on the terms of a recommended acquisition by Banco Santander of Abbey. Following shareholders' approval at the EGMs of Abbey (95 per cent voted in favour, despite vocal opposition from most of those present) and Santander, the acquisition was formally approved by the courts and Abbey became part of Grupo Santander on 12 November 2004.

The agreement saw Santander aquire Abbey for £9.5 billion (or £6.50 per share). Abbey National plc was delisted and removed from the FTSE 100 Index on 12 November 2004 at close of trading. It had been listed for more than 15 years on the London Stock Exchange under the listing ANL. Santander was subsequently added as a secondary listing in July 2005. Abbey National shareholders swapped one share in Abbey National for one of the Spanish bank's shares, and received a special cash dividend of 31 pence per share on 14 December 2004.

Francisco Gómez-Roldán took over as Chief Executive from Luqman Arnold, who received a rumoured £5 million, made up of pay off and share options. Gómez-Roldán died suddenly in July 2006, three weeks before being suceeded by Antonio Horta-Osorio.

Sale of Life Business

In June 2006 Abbey agreed to sell its life businesses to Resolution plc. The businesses sold to Resolution were Scottish Mutual Assurance, Scottish Provident Limited and Abbey National Life, two offshore life companies, Scottish Mutual International and Scottish Provident International Life Assurance Limited. Abbey retained all of its branch based investment and asset management business, James Hay, Abbey's self-invested personal pension company and James Hay Wrap.

Abbey errors in the 1980s

In July 2007 Abbey admitted that errors that it made in the 1980s have contributed to many borrowers mortgage terms being extended by up to 15 years. During this period- which saw considerable turbulence in interest rates- Abbey extended the terms on customers repayment style mortgages without their knowledge.

The Financial Ombudsman Service has stated that Abbey customers may be eligible for compensation.

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