Banco Santander plans more job cuts at Abbey

25th October 2005, Comments 0 comments

25 October 2005, LONDON — Another round of job cuts is feared at mortgage bank Abbey after its Spanish owner said it was ramping up efforts to improve its performance.

25 October 2005

LONDON — Another round of job cuts is feared at mortgage bank Abbey after its Spanish owner said it was ramping up efforts to improve its performance.

Santander Central Hispano did not say how many jobs could face the axe in the future but said cuts would not be "of the magnitude experienced in 2005", the BBC reported.

About 4,000 positions have already been lost, a thousand more than expected.

Now the Spanish bank has warned that Abbey's turnaround will take two more years and cost even more jobs.

Abbey's chief executive Francisco Gomez-Roldan reported positive progress in restoring the UK bank's fortunes, but warned that there was still a "long way to go" before sales and efficiency targets would be met.

Cost savings were on track to reach GBP 300m by the end of 2007, Santander said, but analysts believe a total of 6,500 jobs could eventually go to achieve this, representing about 25 percent of Abbey's workforce.

The Abbey National Group Union said it was disappointed at the prospect of fresh job cuts and will meet with bank officials next week.

"We feel disappointed because our members have already gone through the trauma of 4,000 of their colleagues going and we believed there would be no more," said general secretary Linda Rolph.

"We will scrutinise any more job losses to make sure that the business can survive and that the pressure on staff who remain is not too great."

Meanwhile, in a trading update, Abbey said gross mortgage lending totalled £8.1bn between July and September - up 21 percent on the previous three months.

Unsecured personal loans rose 31 percent in the third quarter compared with the previous three months, Abbey said.

Santander bought Abbey for more than GBP8 billion (USD 14.1bn) in November 2005 and in the first nine months of this year the UK bank added EUR 492 million  (GBP 332m) to its Spanish parent's profit.

The bank said it aimed to raise revenue at Abbey by 5 percent to 10 percent annually over the next three years given that Abbey's sales productivity has lagged 15 percent to 35 percent behind its rivals.

Abbey plans to "grow aggressively" in areas where it is under-represented including current accounts, unsecured loans, investments and pensions.

Growth in its core mortgage business is also a priority, the bank said.

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Subject: Spanish news

 

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