Santander axes 2,000 more as Abbey moves into profit

Those come on top of the 4,000 employees already axed since Banco Santander Central Hispano paid £9.5bn for a struggling Abbey in November 2004.

Experts expect still more job losses in 2007 and forecast another 2,000 fewer workers there by the end of next year. That would mean that the Spanish drive to efficiency would have cut Abbey's total workforce of more than 24,000 people by one-third.

The painful surgery appears to be paying off, with maiden results under Santander's stewardship showing that Abbey converted a pre-tax loss of £21m in 2004 into profits of £596m last year.

Trading profits before tax, which strip out restructuring costs, were a shade more than one-third better at £775m. The bank ripped out £224m of costs in 2005, some £24m above targets revised upwards only in October.

At £2.52bn, revenues for the year were surprisingly strong, although only a touch better than in 2004.

Francisco Gomez-Roldan, Abbey's chief executive, said: "Today's results clearly show that we are on track in our efforts to turn Abbey around. We've made excellent progress in reducing costs across the business, and there are early but clear signs of sustainable revenue growth."

Abbey aims to grow its net share of the British mortgage market to 10 per cent by the end of this year, up from 5.8 per cent in the second half of 2005.

Customer loans and bank deposits were both 4 per cent better in 2005 than in the previous year. Abbey's underlying provision for bad debt was £54m higher than in 2004 after a modest slip in credit quality on unsecured lending.

In October, Abbey revealed that it would lend to riskier customers in its scramble for market share.

In Madrid, Mr Gomez-Roldan's boss - Santander chairman Emilio Botin - signalled that he is still looking for another major acquisition. Europe's biggest bank unveiled a 52 per cent surge in group profits. These hit £4.9bn thanks in part to Abbey's encouraging performance.