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Abbey National reports 35% drop in profits

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  • 29/07/2002
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Abbey National, which recently saw the departure of its chief executive Ian Harley, has announced a...

Abbey National, which recently saw the departure of its chief executive Ian Harley, has announced a 35% fall in profits and said it would refocus on its core retail business.

Lord Burns, the chairman, will take on the role of executive chairman while the bank looks for a successor.

Harley’s exit comes after Abbey issued a profit warning in June, due to the cost of writing off debts at its corporate-based wholesale banking arm. He said pre-tax profits this year would be down on the £1.9bn expected. Reports have suggested as many as six out of 20 major institutional shareholders wanted Harley out.

The bank has since announced it made a profit of £697m in the six months to 30 June, considerably less than £1.06bn earned in the same period last year and below what analysts had expected.

Finance director Stephen Hester is a contender to replace Harley, as are Andrew Pople, the former chief executive of Scottish Mutual and managing director of retail banking, and Mark Pain, managing director of wholesale banking.

Outside contenders include Royal Bank of Scotland’s head of retail banking Gordon Pell and Northern Rock’s chief executive Adam Applegarth.

Lord Burns said: ‘Our priority now is to get the business back on track for growth and ensure we increase shareholder value.


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