Almost 600 jobs could be lost at Abbey National if the high street bank moves its mortgage operations to India. Such a move would hit its call centre and processing businesses in Southampton and Middlesbrough. The jobs could be moved to Abbey's operation in Bangalore.
Abbey runs its mortgage operations in a joint venture with the IT services supplier EDS. That joint venture is now under review, as part of a wider drive by Abbey to revive its business by cutting costs while trying to improve service to customers.
Abbey and EDS said in a joint statement: "Abbey is undertaking a review of all its operational sites as part of an ongoing programme to streamline the business. The aim is to improve cost savings ... [by] reducing duplication of roles, transferring work to larger sites and basing some operations offshore."
The joint venture with EDS was launched in 2001, when Abbey hoped it would save £90m over 10 years. But Abbey's chief executive, Luqman Arnold, is keen to reduce the 50-plus centres across the country in which the bank has business operations. Abbey sees only five sites as central to its future operations: Sheffield, Bradford, Glasgow, Milton Keynes and London.
Abbey transferred 400 jobs to India in January, closing its Warrington and Derby centres. It also has 100 employees in Bangalore working for its life insurance business. A move to wind up the contract with EDS could also signify a willingness by Abbey to remove all obstacles to a possible sale of its business.
It emerged this month that the Spanish bank Banco Santander has shown interest in buying Abbey. There has also been speculation that the US giant Citigroup would consider buying Britain's sixth biggest mortgage lender.