Abbey promises to stick to what it knows best - Business - News - The Independent

Abbey promises to stick to what it knows best

Abbey National, the building society turned bank, has promised staff it will concentrate on existing specialities and not branch out dramatically into new and risky areas.

It has also set itself a benchmark for judging whether it gives value to shareholders, by promising over the long term to beat the total return, including dividends, of the FT Actuaries all- share index and a specially chosen index of financial services competitors.

An unusually detailed corporate mission statement that has taken two years to prepare defines the bank's principal business as the 'manufacture and distribution of personal financial services in the UK'.

Against a background of embarrassing losses from a foray into estate agency in the late 1980s, the statement assures management and staff that Abbey plans to stick to its last and not suddenly leap out in other directions.

It says: 'We will broaden the base of our company by developing related businesses in the UK and Europe only where we can obtain the expertise and resources to attract good quality financial customers, and achieve significant and sustainable competitive advantage.' Briefing documents given to staff with the unpublished statement say: 'Don't worry - we are not going to be rushed into areas we know nothing about. Our purpose is to create shareholder value, not destroy it.'

The statement is also cautious about expansion in Europe, where the bank's early investments in France ran into problems. It says only that 'in the long run' selected Continental European countries will contribute to the bank's success. But the statement does underline the importance of the bank's successful treasury department to future performance.

Abbey's main markets, the statement says, are secured and unsecured lending, short- and long-term savings, insurance protection and personal banking.

The document says: 'Our underlying purpose is to achieve above- average growth in shareholder value over the long term. This can only be accomplished if we meet the needs of our customers, our staff and all of the other stakeholders in our business.'

The bank says it intends to generate above-average growth in the present value of future cash flow. As well as the FT Actuaries benchmark, it will measure its performance against building societies and clearing banks, probably picking 10 companies for comparison.

Abbey has easily beaten the all- share index since its flotation in 1989, with its share price trebling.

Abbey's previous mission statement was one sentence long, defining the bank's business as meeting personal financial needs. But John Fry, a director, said it was a factor in the bank's decision not to go into commercial lending in 1990, a period that produced heavy losses for some banks.

The new statement spells out objectives in detail because it is to be used as a management tool at group and subsidiary level, Mr Fry said.

News
Paper trail: the wedding photograph found in the rubble after 9/11 – it took Elizabeth Keefe 13 years to find the people in it
newsWho are the people in this photo? It took Elizabeth Stringer Keefe 13 years to find out
Arts and Entertainment
Evil eye: Douglas Adams in 'mad genius' pose
booksNew biography sheds light on comic genius of Douglas Adams
Sport
FootballFull debuts don't come much more stylish than those on show here
News
i100
PROMOTED VIDEO
Life and Style
Kim Kardashian drawn backlash over her sexy swimsuit selfie, called 'disgusting' and 'nasty'
fashionCritics say magazine only pays attention to fashion trends among rich, white women
Arts and Entertainment
TVShows like Agents of S.H.I.E.L.D are little more than marketing tools
Arts and Entertainment
Hit the roof: hot-tub cinema east London
architectureFrom pools to football pitches, rooftop living is looking up
Travel
travel
News
The ecological reconstruction of Ikrandraco avatar is shown in this illustration courtesy of Chuang Zhao. Scientists on September 11, 2014 announced the discovery of fossils in China of a type of flying reptile called a pterosaur that lived 120 millions years ago and so closely resembled those creatures from the 2009 film, Avatar that they named it after them.
SCIENCE
Life and Style
tech
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Matisse: The Cut-Outs exhibition attracted 562,000 visitors to the Tate Modern from April to September
art
Life and Style
Models walk the runway at the Tom Ford show during London Fashion Week Spring Summer 2015
fashionLondon Fashion Week 2014
News
Kenny G
news
News
peopleThe black actress has claimed police mistook her for a prostitute when she kissed her white husband
Life and Style
techIndian model comes with cricket scores baked in
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SQL Developer - Watford/NW London - £280 - £320 p/d - 6 months

£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Senior BA - Insurance **URGENT**

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Training Coordinator / Resource Planner - City, London

£35000 - £38000 per annum + Benefits: Ashdown Group: Training Coordinator / Pl...

Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)

£400 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week