BusinessCompany NewsBusiness Week: Abbey issues challenge.

Business Week: Abbey issues challenge.

Britain's sixth-largest bank is entering 2002 fighting. Abbey National, whose annual results are due on Monday, has challenged the Big Four banks by offering interest of 3% on current accounts.

Although it was confident after a strong start to the millennium, the second quarter was rockier, with the collapse of Enron and the resignation of two top executives. Gareth Jones, head of Abbey’s wholesale division left the company, and its chairman, Lord Tugendhat, retired at the end of 2001.

The post of group finance director was abandoned as chartered accountant Mark Pain took over at the helm of the wholesale division. The post of chairman was given to Lord Burns, and all eyes will be on him as he takes up the reigns at the end of the month. Investors were cheered by Burns’ appointment, confident in his vast experience, which includes vast experience at the Treasury during the last recession.

Burns was chief economic adviser of the Treasury in 1980 and served as permanent secretary to the Treasury between 1991 and 1998. Most recently, he chaired the parliamentary financial services and markets joint committee in 1999.

One City analyst said: ‘All eyes have been on Abbey’s management for some time, especially as the bank is remodelling its wholesale banking unit with the position of finance director still vacant.’

And it was the wholesale division that took the biggest hit from the collapse of Enron. The energy giant owed Abbey National about £115m, and the bank expects to lose £95m in its second quarter from the collapse.

Although the retail sector is on the right track, with 45% more current accounts opened by the end of November, the other sectors are a cause for concern.

Financing subsidiary First National expects profits to be 60% lower than last year, hit by market conditions in the retail and motor industries.

The life assurance division is also expected to fall below last year’s levels as it struggles to integrate the newly acquired Scottish Provident.

Related Articles

BDO replaces Deloitte as Mitie auditor

Audit BDO replaces Deloitte as Mitie auditor

3m Emma Smith, Managing Editor
CVR Global appoints partner in London office

Company News CVR Global appoints partner in London office

7m Alia Shoaib, Reporter
FTSE100 failing to provide adequate ethics information

Company News FTSE100 failing to provide adequate ethics information

7m Alia Shoaib, Reporter
Moore Stephens recruits new private client partner

Accounting Firms Moore Stephens recruits new private client partner

10m Emma Smith, Managing Editor
Magma Group announces merger, partner promotions

Accounting Firms Magma Group announces merger, partner promotions

10m Emma Smith, Managing Editor
BDO on ‘recruitment spree’ with multiple partner appointments

Accounting Firms BDO on ‘recruitment spree’ with multiple partner appointments

10m Emma Smith, Managing Editor
Brand strength leads to fee income growth for RSM

Accounting Firms Brand strength leads to fee income growth for RSM

10m Emma Smith, Managing Editor
Mazars strengthens audit team with partner appointment

Accounting Firms Mazars strengthens audit team with partner appointment

10m Emma Smith, Managing Editor