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February 5, 2009

Abbey profit up 20%

by Gill Montia

Story link: Abbey profit up 20%

Abbey has reported a 20% rise in pre-tax profit for 2008.

Consumers opened 572,000 new accounts with the bank during the year, many will have been searching for a safe place to keep their cash amid chaos in the UK banking sector.

The Santander-owned bank also announced that its share of new mortgage lending increased to 28.9% during the year, from a mere 8% in 2007.

The progress looks set to continue because during the second half of 2008 Abbey loans for house purchases accounted for 30.3% of UK net new mortgage lending.

However, the figures should be understood alongside a shrinking mortgage market; according to the Bank of England, new mortgage approvals fell by 58% during 2008.

For Abbey’s parent company, 2008 was an unusually busy year in the UK as the Spanish group completed the purchase of Alliance & Leicester in an all share deal that valued the business at £1.3 billion.

The purchase was intended to support Abbey’s plans to grow its business with small and medium-sized enterprises.

The group also acquired Bradford & Bingley’s (B&B) savings book when the buy-to-let lender was nationalised in September.

At the time, Santander took on board around 2.5 million customers and 200 B&B High Street branches.

 

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