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Abbey looking to BTL as market share is cut

Abbey market share of mortgage lending fell slightly last year as it lost out in the growing specialist sector.

But the company says its entry into buy to let last November should help it get back on track.

Abbey for Intermediaries managing director Ricky Okey says that the company’s performance in the mainstream market was very good but it was unable to benefit from the growing success of the specialist sector. It is likely to launch into sub-prime in the coming months following a review.

The UK’s second-biggest lender saw an increase in gross lending from £27.6bn to £32.6bn but this was down on the market average increase of 20 per cent, taking Abbey’s share down from 9.6 per cent to 9.4 per cent.

Net lending did grow from £3bn to £7.8bn but protection sales fell from £82m to £71m on an annual premium equivalent basis.

Okey says: “If you think about where the market has moved, the specialist lending sector has grown very well. We have recognised that buy to let is an opportunity and we are in that market now. buy to let is our first step and we are still developing our plans on sub-prime.”

Chief executive Antonio Horta-Osorio says: “Abbey made strong progress in 2006. We have accelerated revenue growth and have continued to reduce costs across the business, with cumulative savings of almost £300m one year ahead of target. The bank is on track to meet its three-year-plan targets.

“Partenon, Santander’s core banking platform, is expected to be in place by the end of 2007. The system will provide Abbey with a competitive advantage in terms of both efficiency and a higher qual-ity of service that we can offer our customers.”

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