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Abbey to outsource mortage processing

Abbey National is working on plans to outsource the running of its mortgage processing, credit card and general insurance operations in a bid to slash costs by up to £150m a year.

It is understand the high street bank is in talks with EDS, the American computer specialist, about taking over its mortgage processing system.

Abbey is also discussing plans to distance itself from its credit card operations. It is talking with a number of companies about this, including MBNA, a American credit card company which has been aggressively expanding its stake in the UK in recent years.

In an attempt to shake-up its general insurance business, Abbey is planning to change its relationship with life office CGNU. This move could put 600 jobs at risk. CGNU supplies the bank with general insurance products including buildings and contents, travel and motor insurance. The underwriting is done by Abbey staff, but under the plan the entire operation would be moved to CGNU.

The plans are part of a drive by chief executive Ian Harley to reduce costs in light of the bank&#39s flagging share price. Harley is said to be concerned it could lead to a take-over bid.

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