Abbey National

Abbey National
Abbey National plc
Former type Subsidiary
Industry Financial Services
Fate Renamed under parent brand
Successor Santander UK Plc
Founded 1944
Defunct 2010
Headquarters United Kingdom
Key people Lord Burns, Chairman
António Horta Osório, CEO
Products Banking and Insurance
Employees 20,000
Parent Grupo Santander
Subsidiaries Abbey International
Cater Allen

Abbey National plc was a UK-based bank and former building society, which latterly traded under the Abbey brand name. It became a wholly owned subsidiary of Grupo Santander of Spain in 2004, and was rebranded as Santander in January 2010, forming Santander UK along with the savings business of the former Bradford & Bingley.[1] Before the takeover, it was a constituent of the FTSE 100 Index.



Early history

Head office since 2002, Abbey National House, 2 Triton Square, Regent’s Place, London NW1.
The former 'house roof' umbrella logo

The National Freehold Land Society, officially named the National Permanent Mutual Benefit Building Society to give it legal existence under the Building Societies Act 1836, was established by two Liberal Members of Parliament, Sir Joshua Walmsley and Richard Cobden, in 1849, joined a year later by John Bright. In 1856, it formed the British Land Company, which separated in 1878. Meanwhile, the Abbey Road & St. John's Wood Permanent Benefit Building Society was founded in 1874, based in a Baptist church on Abbey Road in Kilburn. In 1932 the society moved into new headquarters, Abbey House, at 219–229 Baker Street, London, which it occupied until 2002. The site was thought to include 221B Baker Street, the fictional home of Sherlock Holmes,[2][3] and for many years Abbey employed a secretary charged with answering mail sent to Holmes at that address.

The Abbey National Building Society was formed following the merger in 1944 of what had become Abbey Road Building Society (already the second largest) and National Building Society (at the time the sixth largest). The Swansea Thrift Permanent transferred engagements in 1949, followed by the Definite Permanent in 1968, The State Building Society in 1970, Highgate Building Society in 1974 and the Oak Co-operative in 1979.[4]

During the 1970s and 1980s, Abbey National gained a reputation for innovation and, sometimes disruptive, change. It was an early user of computer systems and in the late 1970s, all branches became on-line to a real-time system that maintained customer accounts. Under Chief General Manager Clive Thornton, new types of savings accounts were introduced as well as a cheque account. The administration of the cheque account was restricted by building society rules and the need to find a partner that could clear Abbey's cheques (The Co-operative Bank). Later, Abbey became a full member of the BACS and APACS. Thornton also acted to break the building societies' interest rate consensus.

In 1989 the Abbey National Building Society demutualised and became a public limited company — Abbey National plc. It was the first of the UK building societies to demutualise, doing so on 12 July. Abbey floated on the London Stock Exchange at £1.30 per share, resulting in an unusually large number of small shareholders — approximately 1.8 million initially. The demutualisation process was marred by the discovery of a large number of undelivered share certificates awaiting destruction at a contractor's premises.

Abbey National shares peaked at more than £14 in 2000, before the stock market began a long decline.[5]


Branches of Bradford & Bingley and Abbey opposite each other on Hounslow High Street prior to the January 2010 rebranding.

In 1994, Abbey National purchased “James Hay” one of the UK’s foremost independent provider of self-administered pensions and is one of the pioneer development of SIPP’s with the launch of the in 1996 of the James Hay SIPP.[6] James Hay then went on to grow in straight and launched Abbey Wrap, the first Wrap a service in which IFA’s can keep the clients ISA’s, Peps, Offshore bonds and SIPP in one place. Abbey Wrap Managers was FSA approved in 2003. This was relaunched as James Hay Wrap in 2005.[7]

Two life assurance companies were demutualised and acquired, Scottish Mutual in 1992 and Scottish Provident in 2001, which enabled Abbey to pursue the bancassurance model.[8]

In August 1996, Abbey National merged with the National & Provincial Building Society, which was itself the product of a 1984 merger between the Provincial Building Society and the Burnley Building Society. This merger increased Abbey National's branch network by almost two hundred branches and brought in three million more customers.[9]

In April 2000 Abbey bought Porterbrook from Stagecoach Group for £773 million. Porterbrook was one of the three railway rolling stock operating companies created from by the privatisation of British Rail, leasing rolling stock to the UK train operating companies.[10]

The bank launched its online bank, cahoot, in June 2000.[11]

Abbey also ventured into the wholesale loans business. At first this provided a good profit stream, despite the criticisms of some analysts. This eventually undid the company, however, when Enron turned out to be unsafe and the September 11th attacks in New York damaged confidence in various financial areas. From this point, Abbey struggled from financial losses and a tarnished image. The Chief Executive, Ian Harley, a long-time Abbey employee, resigned and his post was filled by an outsider, Luqman Arnold.[12]

'Abbey' brand launch and thereafter

Arnold spearheaded a major reorganisation of the bank in September 2003 that also saw the brand name shortened to Abbey, the domain name launched and the Abbey National umbrella logo dropped. Banking literature was also simplified as part of the programme, labelled 'turning banking on its head'.[13]

Takeover and rebrand

Just prior to the takeover on 13 July 2004 Richard Chang a risk analyst committed suicide after an interrogation by Kroll Associates.

A branch of Abbey on Commercial Street, Leeds showing Santander marketing material in the windows in January 2010.

On 26 July 2004 Abbey National plc and Banco Santander Central Hispano, SA announced that they had reached agreement on the terms of a recommended acquisition by Banco Santander of Abbey. Following shareholders' approval at the EGMs of Abbey (95 per cent voted in favour, despite vocal opposition from most of those present) and Santander, the acquisition was formally approved by the courts and Abbey became part of Grupo Santander on 12 November 2004.[14]

Francisco Gómez Roldán took over as Chief Executive from Luqman Arnold, who received a rumoured £5 million, made up of pay off and share options. Gómez-Roldán died suddenly in July 2006, three weeks before being succeeded by Antonio Horta Osorio.[15]

As a result of the 2008 banking crisis, Abbey purchased the savings business and branches of Bradford & Bingley in September 2008 following the nationalisation of B&B by HM Government.[16] The purchase of Alliance & Leicester by Santander had been agreed earlier that month.[1]

Abbey migrated all customer accounts to the Partenon computer software used by Santander in June 2008.[17]

Grupo Santander announced in May 2009 they would rename Abbey and the Bradford & Bingley branch network on 11 January 2010. Credit cards issued by Abbey were the first to change, using the Santander brand.[1] The Abbey name has been retained for the Abbey for Intermediaries business and was retained for a time for Abbey International. The latter was subsequently rebranded to Santander Private Banking. The Cater Allen, James Hay[disambiguation needed ] and Cahoot brands have remained.[18]

Divestment of non-core operations

In June 2006 Abbey agreed to sell its life businesses to Resolution plc.[19] The businesses sold to Resolution were Scottish Mutual Assurance, Scottish Provident Limited and Abbey National Life, two offshore life companies, Scottish Mutual International and Scottish Provident International Life Assurance Limited. Abbey retained all of its branch based investment and asset management business, James Hay, Abbey's self-invested personal pension company and James Hay Wrap.

The James Hay business was later sold by Santander to IFG Group on 9 March 2010 for £35m.[20][21]

Past errors

In July 2007 Abbey admitted that errors that it made in the 1980s have contributed to many borrowers mortgage terms being extended by up to 15 years. During this period – which saw considerable turbulence in interest rates – Abbey extended the terms on customers repayment style mortgages without their knowledge.

The Financial Ombudsman Service has stated that Abbey customers may be eligible for compensation.[22]


Abbey's registered office was in London (built on the site of the former Thames Television studios in Euston Road) and its main corporate centre in Milton Keynes. Its savings and banking administration departments are in Bradford, with mortgage centres in Thornaby-on-Tees and Whiteley (which is due to close later in 2010).[23] Abbey currently has Banking Contact Centres in Belfast, Glasgow, Sheffield, and Bootle. Business Banking operations, both administrative and telephony, are also based in Glasgow, having been moved from Taunton and Newport early in 2005.

Abbey previously operated contact centres in Derby, Liverpool and Gateshead. The Derby and Liverpool centres were closed as part of a cost cutting exercise. Those jobs moved to Bangalore and Pune, India, in 2003 (these closed August 2011). Following the takeover by Banco Santander, the Gateshead operations also closed in March 2005. Investments were previously branded as Inscape but were renamed Premium Investments in late 2008, provided by Santander Portfolio Management.[24] This was subsequently subsumed into the more general telephony operations and the original contact centre based in Billericay was closed in April 2009.


  1. ^ a b c "Santander scraps UK bank brands". BBC News. 27 May 2009. Retrieved 2009-05-23. 
  2. ^ Brewer's Britain and Ireland, compiled by John Ayto and Ian Crofton, Weidenfeld & Nicolson, 2005, ISBN 0-304-35385-X
  3. ^ Santander UK plc. "Abbey and Sherlock Holmes". Retrieved 20 March 2010. 
  4. ^ Extract from Building Societies Yearbook 2009/10 (pp.126 & 152) Building Societies Association (retrieved 17 November 2009)
  5. ^ Miles Brignall (13 October 2007). "Demutualisation: Should you sell up now?". The Guardian (London). 
  6. ^ James Harris (10 March 2010). "IFG acquires James Hay". M&A. 
  7. ^ Article: Abbey arm gets given wrap and Sipp control Investment Advisor. 6 June 2005
  8. ^ "Abbey National to Buy Scottish Provident". The New York Times. 4 September 2000. 
  9. ^ Simon Rex (11 January 2010). "List of demutualised building societies". Building Societies Association. Retrieved 20 March 2010. 
  10. ^ Staff writer (20 March 2000). "Stagecoach poised to sell Porterbrook". The Independent (London). 
  11. ^ "Abbey National launches Cahoot". BBC News Online. 12 June 2000. 
  12. ^ "New Abbey boss facing tough task". BBC News Online. 18 October 2002. 
  13. ^ Mike Verdin (25 February 2005). "Abbey ditches logo after 18 months". The Times (London). 
  14. ^ William Kay (6 September 2004). "HBOS fury as EU backs Santander's Abbey bid". The Independent (London). 
  15. ^ Stephen Seawright (27 September 2006). "Bad loans up at Abbey". The Telegraph (London). 
  16. ^ Grupo Santander (29 September 2008). "Bradford & Bingley's direct channels and retail deposits to transfer to Abbey". Retrieved 20 March 2010. 
  17. ^ Abbey completes Partenon core project Karl Flinders. Computer Weekly. 13 June 2008
  18. ^ "Santander to rebrand UK banks". Hilary Osborne, The Guardian (London). 27 May 2009. Retrieved 24 June 2009. 
  19. ^ Hilary Osborne (7 June 2006). "Abbey sells life insurance arm". The Guardian (London). 
  20. ^ IFG Group plc. "About us (James Hay)". Retrieved 20 March 2010. 
  21. ^ Chris Salih (9 December 2009). "IFG Group to buy James Hay for £35m". Money Marketing. 
  22. ^ Gill Montia (2 July 2007). "Abbey Borrowers Face Lengthened Mortgage Terms". The Banking Times. 
  23. ^ Fran Duckett-Pike (30 March 2010). "Santander set to axe 160 jobs at Whiteley call centre". The News. Retrieved 2010-10-03. 
  24. ^ Santander UK plc. "Premium Investments: Savings: Santander". Retrieved 20 March 2010. 

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