Abbey National
Encyclopedia
Abbey National plc was a UK-based bank and former building society
Building society
A building society is a financial institution owned by its members as a mutual organization. Building societies offer banking and related financial services, especially mortgage lending. These institutions are found in the United Kingdom and several other countries.The term "building society"...

, which latterly traded under the Abbey brand name. It became a wholly owned subsidiary of Grupo Santander
Grupo Santander
The Santander Group is a banking group centered on Banco Santander, S.A., the largest bank in the Eurozone and one of the largest banks in the world in terms of market capitalisation. According to Forbes Magazine Global 2000, it is the 13th largest public company in the world...

 of Spain in 2004, and was rebranded as Santander
Santander UK
Santander UK plc is a wholly owned subsidiary of the Spanish Santander Group. Based in the United Kingdom, it operates under the name of Santander. Santander is the third largest bank in the UK in terms of deposits, the second largest in terms of mortgages held, and the fourth largest in terms of...

 in January 2010, forming Santander UK
Santander UK
Santander UK plc is a wholly owned subsidiary of the Spanish Santander Group. Based in the United Kingdom, it operates under the name of Santander. Santander is the third largest bank in the UK in terms of deposits, the second largest in terms of mortgages held, and the fourth largest in terms of...

 along with the savings business of the former Bradford & Bingley
Bradford & Bingley
Bradford & Bingley plc is a British bank with headquarters in the West Yorkshire town of Bingley. In 2008, partly due to the credit crunch, the bank was nationalised and in effect split into two parts; the mortgage book remained with the now publicly owned Bradford & Bingley plc, and the deposits...

. Before the takeover, it was a constituent of the FTSE 100 Index
FTSE 100 Index
The FTSE 100 Index, also called FTSE 100, FTSE, or, informally, the footsie , is a share index of the 100 most highly capitalised UK companies listed on the London Stock Exchange....

.

Early history

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
Richard Cobden
Richard Cobden was a British manufacturer and Radical and Liberal statesman, associated with John Bright in the formation of the Anti-Corn Law League as well as with the Cobden-Chevalier Treaty...

, in 1849, joined a year later by John Bright
John Bright
John Bright , Quaker, was a British Radical and Liberal statesman, associated with Richard Cobden in the formation of the Anti-Corn Law League. He was one of the greatest orators of his generation, and a strong critic of British foreign policy...

. 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
Baptist
Baptists comprise a group of Christian denominations and churches that subscribe to a doctrine that baptism should be performed only for professing believers , and that it must be done by immersion...

 church on Abbey Road
Abbey Road (street)
Abbey Road is a thoroughfare located in the borough of Camden and the City of Westminster in London, running roughly northwest to southeast through St. John's Wood, near Lord's Cricket Ground...

 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
221B Baker Street
221B Baker Street is the London address of the fictional detective Sherlock Holmes, created by author Sir Arthur Conan Doyle. In the United Kingdom, postal addresses with a number followed by a letter may indicate a separate address within a larger, often residential building...

, the fictional home of Sherlock Holmes
Sherlock Holmes
Sherlock Holmes is a fictional detective created by Scottish author and physician Sir Arthur Conan Doyle. The fantastic London-based "consulting detective", Holmes is famous for his astute logical reasoning, his ability to take almost any disguise, and his use of forensic science skills to solve...

, 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.

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
BACS
Bacs Payment Schemes Limited is a United Kingdom scheme for the electronic processing of financial transactions. BACS direct debits and BACS direct credits are made using the BACS system...

 and APACS
APACS
The UK Payments Administration Ltd is a United Kingdom trade organisation that brings together all payment systems organisations and gives banks, building societies and card issuers a forum where they can work together on non-competitive issues...

. 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
Public limited company
A public limited company is a limited liability company that sells shares to the public in United Kingdom company law, in the Republic of Ireland and Commonwealth jurisdictions....

 — Abbey National plc. It was the first of the UK building societies
Building society
A building society is a financial institution owned by its members as a mutual organization. Building societies offer banking and related financial services, especially mortgage lending. These institutions are found in the United Kingdom and several other countries.The term "building society"...

 to demutualise, doing so on 12 July. Abbey floated on the London Stock Exchange
London Stock Exchange
The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...

 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.

Acquisitions

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. 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.

Two life assurance companies were demutualised and acquired, Scottish Mutual in 1992 and Scottish Provident in 2001, which enabled Abbey to pursue the bancassurance
Bancassurance
The Bank Insurance Model , also sometimes known as 'Bancassurance', is the term used to describe the partnership or relationship between a bank and an insurance company whereby the insurance company uses the bank sales channel in order to sell insurance products.BIM allows the insurance company to...

 model.

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.

In April 2000 Abbey bought Porterbrook
Porterbrook
Porterbrook is one of the three major ROSCOs in the United Kingdom...

 from Stagecoach Group
Stagecoach Group
Stagecoach Group plc is an international transport group operating buses, trains, trams, express coaches and ferries. The group was founded in 1980 by the current chairman, Sir Brian Souter, his sister, Ann Gloag, and her former husband Robin...

 for £773 million. Porterbrook was one of the three railway rolling stock operating companies created from by the privatisation of British Rail
British Rail
British Railways , which from 1965 traded as British Rail, was the operator of most of the rail transport in Great Britain between 1948 and 1997. It was formed from the nationalisation of the "Big Four" British railway companies and lasted until the gradual privatisation of British Rail, in stages...

, leasing rolling stock to the UK train operating companies.

The bank launched its online bank, cahoot
Cahoot
cahoot is the internet division of Santander UK plc, the United Kingdom subsidiary of Banco Santander of Spain. Cahoot was launched in 2000 as the internet-based banking brand of Abbey National plc, and at the end of 2004 had some 650,000 customers...

, in June 2000.

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
Enron
Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. Before its bankruptcy on December 2, 2001, Enron employed approximately 22,000 staff and was one of the world's leading electricity, natural gas, communications, and pulp and paper companies, with...

 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.

'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 abbey.com domain name
Domain name
A domain name is an identification string that defines a realm of administrative autonomy, authority, or control in the Internet. Domain names are formed by the rules and procedures of the Domain Name System ....

 launched and the Abbey National umbrella logo dropped. Banking literature was also simplified as part of the programme, labelled 'turning banking on its head'.

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.

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
Grupo Santander
The Santander Group is a banking group centered on Banco Santander, S.A., the largest bank in the Eurozone and one of the largest banks in the world in terms of market capitalisation. According to Forbes Magazine Global 2000, it is the 13th largest public company in the world...

 on 12 November 2004.

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.

As a result of the 2008 banking crisis, Abbey purchased the savings business and branches of Bradford & Bingley
Bradford & Bingley
Bradford & Bingley plc is a British bank with headquarters in the West Yorkshire town of Bingley. In 2008, partly due to the credit crunch, the bank was nationalised and in effect split into two parts; the mortgage book remained with the now publicly owned Bradford & Bingley plc, and the deposits...

 in September 2008 following the nationalisation of B&B by HM Government. The purchase of Alliance & Leicester
Alliance & Leicester
Alliance & Leicester was a former UK-based bank and PLC, which in later years operated as a trading name of Santander UK before being rebranded as Santander. Alliance & Leicester was legally acquired in May 2010 by Santander UK, and was fully incorporated by 2011...

 by Santander had been agreed earlier that month.

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

Grupo Santander
Grupo Santander
The Santander Group is a banking group centered on Banco Santander, S.A., the largest bank in the Eurozone and one of the largest banks in the world in terms of market capitalisation. According to Forbes Magazine Global 2000, it is the 13th largest public company in the world...

 announced in May 2009 they would rename Abbey and the Bradford & Bingley
Bradford & Bingley
Bradford & Bingley plc is a British bank with headquarters in the West Yorkshire town of Bingley. In 2008, partly due to the credit crunch, the bank was nationalised and in effect split into two parts; the mortgage book remained with the now publicly owned Bradford & Bingley plc, and the deposits...

 branch network on 11 January 2010. Credit cards issued by Abbey were the first to change, using the Santander brand. The Abbey name has been retained for the Abbey for Intermediaries business and was retained for a time for Abbey International
Abbey International
Santander Private Banking is the offshore banking division of Grupo Santander in the Channel Island of Jersey.In 2011 the business was renamed from Abbey International....

. The latter was subsequently rebranded to Santander Private Banking. The Cater Allen
Cater Allen
Cater Allen is a private bank operating in the United Kingdom. It is a subsidiary of Santander. Tracing its history back to a bank founded in Blackburn in 1816, it was independent for 180 years, before being purchased in 1997 by Abbey National...

, James Hay
James Hay
James Hay was an American politician from Virginia. He was a member of the United States Congress and a judge on the United States Court of Claims....

and Cahoot
Cahoot
cahoot is the internet division of Santander UK plc, the United Kingdom subsidiary of Banco Santander of Spain. Cahoot was launched in 2000 as the internet-based banking brand of Abbey National plc, and at the end of 2004 had some 650,000 customers...

 brands have remained.

Divestment of non-core operations

In June 2006 Abbey agreed to sell its life businesses to Resolution plc
Resolution plc
Resolution plc was a UK insurance company headquartered in the City of London. It was listed on the London Stock Exchange and was once a constituent of the FTSE 100 Index but was acquired by the Pearl Group in May 2008.-Early history:...

. 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
Santander UK
Santander UK plc is a wholly owned subsidiary of the Spanish Santander Group. Based in the United Kingdom, it operates under the name of Santander. Santander is the third largest bank in the UK in terms of deposits, the second largest in terms of mortgages held, and the fourth largest in terms of...

 to IFG Group on 9 March 2010 for £35m.

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 periodwhich saw considerable turbulence in interest ratesAbbey 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.

Operations

Abbey's registered office was in London (built on the site of the former Thames Television
Thames Television
Thames Television was a licensee of the British ITV television network, covering London and parts of the surrounding counties on weekdays from 30 July 1968 until 31 December 1992....

 studios in Euston Road
Euston Road
Euston Road is an important thoroughfare in central London, England, and forms part of the A501. It is part of the New Road from Paddington to Islington, and was opened as part of the New Road in 1756...

) and its main corporate centre in Milton Keynes
Milton Keynes
Milton Keynes , sometimes abbreviated MK, is a large town in Buckinghamshire, in the south east of England, about north-west of London. It is the administrative centre of the Borough of Milton Keynes...

. Its savings and banking administration departments are in Bradford
Bradford
Bradford lies at the heart of the City of Bradford, a metropolitan borough of West Yorkshire, in Northern England. It is situated in the foothills of the Pennines, west of Leeds, and northwest of Wakefield. Bradford became a municipal borough in 1847, and received its charter as a city in 1897...

, with mortgage centres in Thornaby-on-Tees
Thornaby-on-Tees
Thornaby-on-Tees is a town and civil parish within the Borough of Stockton-on-Tees, in the ceremonial county of North Yorkshire, England. It is on the south bank of the River Tees, three miles southeast of Stockton-on-Tees, and four miles southwest of Middlesbrough town centre and has a...

 and Whiteley (which is due to close later in 2010). Abbey currently has Banking Contact Centres in Belfast
Belfast
Belfast is the capital of and largest city in Northern Ireland. By population, it is the 14th biggest city in the United Kingdom and second biggest on the island of Ireland . It is the seat of the devolved government and legislative Northern Ireland Assembly...

, Glasgow
Glasgow
Glasgow is the largest city in Scotland and third most populous in the United Kingdom. The city is situated on the River Clyde in the country's west central lowlands...

, Sheffield
Sheffield
Sheffield is a city and metropolitan borough of South Yorkshire, England. Its name derives from the River Sheaf, which runs through the city. Historically a part of the West Riding of Yorkshire, and with some of its southern suburbs annexed from Derbyshire, the city has grown from its largely...

, and Bootle
Bootle
Bootle is a town within the Metropolitan Borough of Sefton in Merseyside, England, and a 'Post town' in the L postcode area. Formally known as Bootle-cum-Linacre, the town is 4 miles  to the north of Liverpool city centre, and has a total resident population of 77,640.Historically part of...

. Business Banking operations, both administrative and telephony, are also based in Glasgow
Glasgow
Glasgow is the largest city in Scotland and third most populous in the United Kingdom. The city is situated on the River Clyde in the country's west central lowlands...

, having been moved from Taunton
Taunton
Taunton is the county town of Somerset, England. The town, including its suburbs, had an estimated population of 61,400 in 2001. It is the largest town in the shire county of Somerset....

 and Newport
Newport
Newport is a city and unitary authority area in Wales. Standing on the banks of the River Usk, it is located about east of Cardiff and is the largest urban area within the historic county boundaries of Monmouthshire and the preserved county of Gwent...

 early in 2005.

Abbey previously operated contact centres in Derby
Derby
Derby , is a city and unitary authority in the East Midlands region of England. It lies upon the banks of the River Derwent and is located in the south of the ceremonial county of Derbyshire. In the 2001 census, the population of the city was 233,700, whilst that of the Derby Urban Area was 229,407...

, Liverpool
Liverpool
Liverpool is a city and metropolitan borough of Merseyside, England, along the eastern side of the Mersey Estuary. It was founded as a borough in 1207 and was granted city status in 1880...

 and Gateshead
Gateshead
Gateshead is a town in Tyne and Wear, England and is the main settlement in the Metropolitan Borough of Gateshead. Historically a part of County Durham, it lies on the southern bank of the River Tyne opposite Newcastle upon Tyne and together they form the urban core of Tyneside...

. The Derby
Derby
Derby , is a city and unitary authority in the East Midlands region of England. It lies upon the banks of the River Derwent and is located in the south of the ceremonial county of Derbyshire. In the 2001 census, the population of the city was 233,700, whilst that of the Derby Urban Area was 229,407...

 and Liverpool
Liverpool
Liverpool is a city and metropolitan borough of Merseyside, England, along the eastern side of the Mersey Estuary. It was founded as a borough in 1207 and was granted city status in 1880...

 centres were closed as part of a cost cutting exercise. Those jobs moved to Bangalore
Bangalore
Bengaluru , formerly called Bengaluru is the capital of the Indian state of Karnataka. Bangalore is nicknamed the Garden City and was once called a pensioner's paradise. Located on the Deccan Plateau in the south-eastern part of Karnataka, Bangalore is India's third most populous city and...

 and Pune
Pune
Pune , is the eighth largest metropolis in India, the second largest in the state of Maharashtra after Mumbai, and the largest city in the Western Ghats. Once the centre of power of the Maratha Empire, it is situated 560 metres above sea level on the Deccan plateau at the confluence of the Mula ...

, India, in 2003 (these closed August 2011). Following the takeover by Banco Santander, the Gateshead
Gateshead
Gateshead is a town in Tyne and Wear, England and is the main settlement in the Metropolitan Borough of Gateshead. Historically a part of County Durham, it lies on the southern bank of the River Tyne opposite Newcastle upon Tyne and together they form the urban core of Tyneside...

 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. This was subsequently subsumed into the more general telephony operations and the original contact centre based in Billericay
Billericay
Billericay is a town and civil parish in the Basildon borough of Essex, England. It lies within the London Basin, has a population of 40,000, and constitutes a commuter town east of central London. The town has three secondary schools and a variety of open spaces...

was closed in April 2009.
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