Abbey chief challenges banks to put up or shut up on bids

Ian Harley, chief executive of Abbey National, issued a challenge to the big four banks yesterday to put up or shut up, saying he was not against a consolidation deal if it brought "clarity" and value to shareholders.

Ian Harley, chief executive of Abbey National, issued a challenge to the big four banks yesterday to put up or shut up, saying he was not against a consolidation deal if it brought "clarity" and value to shareholders.

Speaking as Abbey released an upbeat trading statement yesterday for the third quarter, Mr Harley hit back at recent City calls for his removal saying that the issue was not opposition to a deal on the Abbey board but whether any potential bidder for Abbey could make a deal pay.

"We are not deal averse," he said. "In fact we have done more for consolidation than most. We are a public company and if any of the big four want to buy us that is their call."

However, he pointed out that with an underlying cost income ratio of 40 per cent, one of the lowest of any bank in the world, it would be hard for any bidder to claim they could run Abbey more efficiently than the current management team.

"If someone wants to take the fat out of that they are welcome to try," he said. He also pointed out that few banks could demonstrate anything like Abbey's success in adding customers.

Mr Harley's outburst came in response to a City whispering campaign which has seen the Abbey chief executive come under fire for allegedly standing in the way of a massive cost saving merger with a big four bank.

Bankers say Mr Harley has rebuffed repeated bid approaches from Barclays and Lloyds TSB because of concern that the huge branch closure programme these would entail would damage the brand and alienate customers on a massive scale.

Yesterday's trading statement showed current account applications 50 per cent higher than in the first half of the year, boosted by September's launch of a special student account in a deal struck with the National Union of Students.

Retail unsecured lending was up 19 per cent, while the the new e-saver online account has pulled in £500m since launch.

Abbey shares closed down 1p at 873p yesterday.