Abbey plans to open 300 branches

By ALAN O'SULLIVAN
Updated: 12:14 EST, 10 December 2007

Abbey National is to open a further 300 branches nationwide by 2012 under a wide-ranging expansion program initiated by its Spanish owner, Banco Santander.

This will raise is 700-strong branch network to 1,000, with the first opened next year as part of the bank's first major expansion since its demutualization.

It is believed some of these will be in the North-east and Midlands, areas in which Abbey has admitted to being under-represented in the past.

The announcement follows expansion plans unveiled by High Street names such as HBOS and HSBC, which are both in the process of adding 50 branches to their network this year.

Since Abbey was acquired by Santander for £9.5bn in 2004, its Spanish owner has cut down on costs by reducing its workforce from 25,000 to 16,000.

A spokesperson for the bank said it was undecided yet whether the bank would again add to this workforce or spread its existing capability across the new network, as planning on the expansion will not begin until next year.

He said: '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 cusomers prefer dealing with our staff face to face in a branch.'

The news follows widespread complaints about Abbey's complaints and customer service procedures, some of which involve dealing with overseas call centres.

As a part of the Abbey expansion, Santander has been updating the bank's information technology systems, which are allegedly behind months-long customer delays in its probate department. It is moving approximately 18m customers from several computer systems to a single one.

However Abbey has said this is due to the departure of key staff in the department and a higher-than-expected death rate among its customers.

Santander posted strong results last week: the share price has increased by more than 50% since the Abbey takeover in November 2004. At the half-year in 2007, Abbey showed an increase in its net profit of 20% over a year; its costs relative to its income have fallen from 70% to 50.2%.