Abbey to open 300 new branches

Published on Tuesday 11 December 2007 01:25

BANKING group Abbey is set to open 300 new branches - boosting its UK network by almost 50 per cent.

The expansion is part of plans by the bank's Spanish owner, Santander, to bolster the UK business in areas such as investments, business banking and specialist buy-to-let mortgages.

While details of where the new branches will be located have not been finalised, some are likely to be in Scotland, where Abbey already operates 65 branches.

Santander, which acquired Abbey in 2004, said it planned to begin opening branches in 2009 with a target of increasing its 700-strong network to 1,000 by 2012.

Rival HBOS, which owns Bank of Scotland, has also undergone expansion this year - spending at least 100 million on opening 50-plus branches.

Abbey has previously said it is under-represented in regions such as the north-east of England and the Midlands. The company said yesterday: "We believe that branches are still the best place to do business. Although we offer the option of telephone and internet banking, we have found that many of our customers prefer dealing with our staff face-to-face in a branch."

There has been speculation that Santander might look for more UK acquisitions, but Abbey chief executive Antonio Horta-Osorio said in an interview: "We are always open to consider opportunities, but we are very focused and our main priority is this project of internal growth."

The Spanish firm concentrated on reducing costs during the first two years of ownership, with substantial job cuts leaving 16,500 staff and 712 branches.

Abbey, best known for mortgages and savings, recently launched a new credit card. The UK's third-largest lender, it has forecast that UK house prices will "decelerate" in a soft landing for the property market.

It is still offering mortgages of five times borrowers' income amid concerns consumers have been encouraged to overstretch themselves. But Horta-Osorio said credit quality in the Abbey mortgage book remained strong.