Job losses at Abbey National are set to spiral after the UK bank’s Spanish owners admitted today that the elimination of 4,000 posts this year was not enough.
Santander Central Hispano was silent on reports that a further 2,500 job cuts are planned, stating only that the cull would not be “of the magnitude experienced in 2005”.
Its comments were greeted with dismay by unions, which pledged to meet bank officials next week to express concerns.
Linda Rolph, general secretary of the Abbey National Group Union, said: “We will scrutinise any more job losses to make sure that the business can survive and that the pressure on staff who remain is not too great.”
If the reports that 2,500 jobs are under threat prove true, then Abbey will have just three-quarters of its 26,000 workforce when it was acquired by Santander for £9.5bn (€14bn) a year ago.
Santander expects its initial overhaul at Abbey to save some £200m (€295m) this year – twice the amount predicted at the time of its takeover.
It aims to strip out £300m (€442.6m) of costs by the end of 2007 and hopes to make more savings by introducing its Partenon banking platform to Abbey.
Details of the renewed cost-cutting drive came as Abbey chief executive Francisco Gomez-Roldan stressed that good progress had been made in restoring the fortunes of the bank.
Gross mortgage lending totalled £8.1bn (€11.9bn) between July and September – up 21% on the previous three months – and the market share of Abbey improved to 10%.
Gains were also enjoyed in savings accounts during a quarter when unsecured personal loans rose 31% compared with the previous three months. Abbey added that pre-tax profits were well ahead of the run rate seen in the first half.
“However, we still have a long way to go before we reach the sales and efficiency targets we set out at the time of the acquisition,” Mr Gomez-Roldan said.
Cost savings will provide further scope for investment in high street branches where Abbey is planning to enter more lucrative areas of the mortgage market.
Abbey is also targeting a stronger position in personal loans, current accounts and small business banking as it chases revenues growth of between 5% and 10% each year from 2006 to 2008.