Stock Exchange probes Abbey gaffe

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The Independent Online
THE STOCK Exchange was last night firing questions at Abbey National's brokers, Warburg Securities, after the bank mistakenly used an advertising campaign to publish price-sensitive information about a bail-out of its French subsidiary.

The emergence of the advertising gaffe, which appeared in French newspapers last Wednesday, prompted an after-hours Stock Exchange announcement by Abbey, detailing property lending problems in its French subsidiary and a capital injection of Fr300m ( pounds 37m).

The details were published in French newspapers in advertisements to mark the change of name of Abbey's mortgage subsidiary from Ficofrance to Abbey National France.

The Stock Exchange said it was aware of what had happened and was seeking clarification from the company's brokers.

According to Abbey's head office, French management was giving the background to the change of name and to market conditions in France, but failed to take into account the closed period ahead of the results.

A spokesman said: 'It clearly was a misunderstanding and we have taken measures to make sure it won't happen again.' Nobody had been fired or disciplined, the spokesman said.

Abbey said it knew in London on Friday what the advertisements had said, and had started to look into the implications, which led to the announcement last night. This was after the story had appeared in an evening newspaper.

The exchange is likely to take disciplinary action against Abbey only if the leak was deliberate or there was a cover-up, neither of which appears to be the case. There were no unusual movements in Abbey's share price last week. Last night it closed 1.5p higher at 360p.

Warburg is not directly involved, but the exchange routinely questions companies through their brokers.

The statement said the current conditions in the French property market would require provisions against bad debts for 1992, which would lead to a loss at Abbey National France during the year.

Part of the subsidiary's lending related to loans to property developers, and all lending of this nature had now been terminated, the bank said. It added that it had injected the Fr300m to meet capital requirements and support future growth. The loss last year was less than the capital injection.