Banco Santander plans £300m cost cuts at Abbey
26 July 2004 | 8919 views | 0
Spain's Banco Santander Central Hispanico, the bank that is taking over Abbey in an £8.5bn deal, has disclosed details of a three year cost cutting plan which includes a reduction in middle and back office processing at the UK bank.
In a document disclosing details of the merger, Banco Santander says it plans to reduce costs at Abbey by £300m a year, mainly through cut-backs in technology, although the Spanish bank did not specify how many jobs would be axed.
The Spanish bank says it expects to make "significant savings" in IT by eliminating any duplicate systems and projects at Abbey that overlap with its own.
Banco Santander also states that it plans to invest in customer facing areas whilst extracting maximum efficiency from the back office. Cost savings that will start to materialise from 2007 onwards will be based on a thorough re-engineering of Abbey's core systems and processes and will result in significant reductions in the size of middle and back-office processing areas, improved productivity in branches and improved use of IT infrastructure.
The takeover of Abbey will make Banco Santander the world's 10th biggest bank by market value and the fourth largest in Europe.