Abbey National increases share of mortgage and savings market

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The Independent Online

By Andrew Garfield, Financial Editor

By Andrew Garfield, Financial Editor

27 October 1999

ABBEY NATIONAL, the high street bank, yesterday reported a strong recovery in its core mortgage and savings business in the third quarter of this year, as attempts to claw back market share from new entrants such as Standard Life Bank and Egg, the Prudential's direct bank, bore fruit.

The bank is also working on what is describes as "a self-contained virtual banking proposition" to be launched next spring. This is in addition to its plans for a banking service on Open, BSkyB's home shopping channel, which launches on 1 November, and an Internet channel for existing customers.

Net mortgage lending rose 20 per cent to £3bn from £2.5bn in the second quarter, as a result of an aggressive marketing policy and a more competitive range of products, including its own version of Standard Life's flexible mortgage. Life insurance sales were up 41 per cent in the year to the end of September, with £2.5bn-worth sold.

The strong recovery was welcomed in the City, with Abbey shares rising nearly 4 per cent yesterday to 1,130p.

Abbey's attempt to be seen as a potential merger partner for NatWest has been undermined by the poor recent performance of its shares. NatWest's defence document is expected today.