Abbey National

Abbey National plc is a bank that is the main UK operation of the Spanish financial conglomerate Grupo Santander. It has around 20,000 employees. Abbey National offers similar services to other retail banks with savings, investment products and consumer lending. It is particularly strong in mortgage lending. It offers Life Assurance. Abbey National acquired two formerly mutual Scottish life assurance companies, Scottish Provident and Scottish Mutual, in 2001.


Cahoot is Abbey’s internet bank. It was launched in 2000 and attempted to use its low cost base to attract savers by higher than average interest rates.

Grupo Santander

Grupo Santander is a large Spanish financial group. It bought Abbey in 2004, meaning that Abbey shareholders are now paid dividends in Euros. Santander was comparatively conservatively run prior to the credit crunch which has meant that it came out in a strong financial position, becoming the largest bank by market capitalization. It took advantage of this to buy the Alliance & Leicester and Bradford & Bingley groups which both were former building societies that had recklessly over leant to amateur landlords during the property boom.

Both Abbey and Bradford & Bingley are going to soon lose their brands for their UK operations being called “Santander” instead; The Santander logo is already used. The Abbey name will be kept for international operations. Globally Santander has 65 million customers, 131,819 employees, 2.27 million shareholders (many of them former Abbey shareholders) and 11,178 branches.

Conversion to bank status

Abbey National was the first building societies to convert from building society to bank status, unlike many other societies doing this at the suggestion of the management rather than under pressure from an organized group of shareholders. Before being taken over in 2004 they were a constituent part of the FTSE 100 which means that they were among the UK’s top 100 quoted companies by value.

Abbey was hurt by their loans to Enron rising as a result of its foray into lending to big and international businesses, a departure from its traditional business of savings and mortgages. In the end this meant that it could not continue as an independent bank, eventually being taken over by Santander.

James Hay

James Hay was bought by Abbey National in 1994. A pensions company, it has been the market leader in providing Self Invested Pension Plans - pension products that allow customers to choose the assets attracting interest rate relief. These can be attractive to adventurous investors, the wealthy who like to control their assets and small business owners who can use their pension fund to finance aspects of their business.

Carter Allen

Cartter Allen is a private bank that came into Abbey’s orbit. Unlike the mass market brands it will be retaining its identity and will not be renamed Santander. Santander have their own international private banking operation although this does not have much of a presence in Britain.

In 2000 Abbey acquired the train leasing company Porterbrook from Stagecoach. This is a company that leases rail stock such as engines and carriage to train operating companies. This has been a popular tyoe if infrastructure investment for many financial companies.

Abbey National History

Abbey National started as in 1874. They took their name from the Abbey Road where they were based in a local Baptist church. In 1932 Abbey moved to 219 to 229 Baker Street, and have been associated with Sherlock Holmes, who lived at 221b Baker Street, ever since. They merged with the National Building Society in 1944, in the process changing the name of the merged society to Abbey National.

During the 1970s Abbey National gained a reputation as an innovator, introducing computers at a branch level, introducing cheque books (which until then had been restricted to banks( and breaking the building society interest rate cartel.

Bradford & Bingley and Alliance & Leicester

Bradford & Bingley and Alliance & Leicester were two regionally based building society operations based in Yorkshire and Sussex respectively. They both demutualised after Abbey, both took on an aggressive high growth model which involved borrowing on the international market and lending to higher risk borrowers (usually ‘buy to let’ landlords) and who both found that they could not borrow sufficient funds to cover the liabilities becoming due after the credit crunch. They are both merging with Abbey under the “Santander” name.

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