Abbey staff to learn scale of takeover job cuts

Abbey National staff were today expected to discover how many jobs will go in the bank’s planned takeover by Spanish group Santander Central Hispano (SCH).

Abbey National staff were today expected to discover how many jobs will go in the bank’s planned takeover by Spanish group Santander Central Hispano (SCH).

Reports have said Emilio Botin, chairman of SCH, will tell Abbey’s union leaders that as many as 4,500 positions could be axed over three years.

That is still dependent on SCH’s success in seeing through its £8.2bn (€12bn) takeover offer, which was tabled last month but is now under threat from a possible rival bid from Halifax and Bank of Scotland owner HBOS.

Analysts expect a move by the UK bank to generate far more savings as around 70% of Abbey’s 741 branches are within a quarter of a mile of an HBOS outlet.

SCH does not have a branch network in the UK and will instead seek efficiencies through improvements to IT systems.

The Spanish bank will outline its plans for Abbey’s 26,000-strong workforce when it meets representatives of the Abbey National Group Union later today. An announcement about proposed job losses could follow.

However, it was reported yesterday that SCH will walk away if the involvement of HBOS drags Abbey into a drawn-out investigation by competition authorities.

According to The Sunday Telegraph, SCH is concerned about the potential damage to Abbey’s business by a probe that could last longer than 24 weeks.

Earlier this month it emerged that HBOS was examining whether to mount a counter-bid – a move that could lead to a repeat of the inquiry that blocked the £18bn (€26.6bn) attempted takeover of Abbey by Lloyds TSB in 2001.

SCH hopes to complete the acquisition by the end of the year but must first win the approval of shareholders, many of whom are believed to have doubts.

However, the takeover has the support of the board at Abbey, which is the UK’s second biggest provider of mortgages and savings.

Abbey has reported two years of heavy losses, although it returned to the black during the six months to June 30 with profits of £350m (€517.4m) against losses of £144m (€212.9m) last time.

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