Abbey National, Britain's struggling high street bank, yesterday said it had laid the foundations for recovery which customers would start to notice by the end of the year.
Luqman Arnold, appointed to turn the UK's second biggest mortgage lender around last October, said he wanted to "manage expectations", but pledged that customers would "notice a difference" by December. Mr Arnold remained tight-lipped on the details of how he would spruce up Abbey's offering in his three-year plan to get the bank back on its feet. He has promised a range of new products and approach to dealing with customers as a way of enticing existing and new Abbey customers to buy far more products from the bank.
In a pre-close statement ahead of half-year results, Abbey said pre-tax profit at its personal financial services business, which will be its core proposition, was running about 10 per cent to 15 per cent lower in 2003 than a year earlier as lending profit margins shrink.
Price-cutting at the retail bank's mortgage business and a drop in the value of insurance investments have contributed to the decline, which Abbey flagged up earlier this year. Its shares ended up 1p at 513p.
Abbey said its plan to sell off junk bonds, derivatives and other unwanted assets built up by the previous management was "ahead of schedule". The division holding the unwanted assets has reduced assets from £60bn to £33bn in six months. Mr Arnold's brief tenure has been dominated by continued speculation that Britain's sixth biggest bank will not remain independent for long. But Mr Arnold said: " If we had really decided to sell, this would have been too much like hard work."
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