Abbey National is unlikely to find its winning ways again until next year according to today's Inter...
Abbey National is unlikely to find its winning ways again until next year according to today's Interim Pre-close Statement, which points out that earnings will fall far short of previous expectations.
Poorly performing junk bonds, exposure to failed energy company Enron, and investments in telecoms stocks have hit the mortgage lender with provisions for £256m in bad debts, and that just for the six months to 30 June.
Sales of with-profits bonds have also fallen sharply.
This means the Abbey National group's full-year earnings are expected to be "substantially lower" than was the case last year, when it reported pre-tax profit of £1.94bn.
"This will be one of our toughest years, although we do expect the second half to be better" a spokeswoman says.
The company's wholesale business is being reorganised to take advantage of opportunities in the "wealth management and long-term savings" markets, the spokeswoman says, but both are beset by the issues of regulatory changes and ongoing low investor confidence.
In the UK, despite a booming mortgage market, the equities market remains in the doldrums, creating a mixed picture for the company's performance.
And the question of US recovery is still up in the air.
Abbey National's first half results are expected to be published on 24 July.
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