Shareholder fury at Abbey

Abbey was faced with furious shareholders last week after it admitted at its annual general meeting that its rebranding had cost over £11m.

Shareholders at the AGM in London last Thursday expressed their anger over Abbey&#39s financial losses and said the name change was a total waste of money. One shareholder told the executives present at the meeting that they were “not worth a cup of cold water between them”.

Abbey, which is undergoing a major restructuring programme, reported losses of £686m in 2003. Although its first quarter trading statement highlights a return to profit at a group statutory level, net mortgage lending is down 16% compared with the same time last year to £2.1bn.

Abbey&#39s estimated gross and net mortgage lending market shares are also down from 10.7% to 10.1% and from 10.9% to 9.2% respectively.

During the meeting chairman Tony Burns was put under pressure concerning the large remuneration packages the company&#39s executives have received. The shareholders believe the board should only receive rewards when the company is back on track. One shareholder spoke of his disbelief that percentage increases in executive remunerations were as high as 70% excluding share options and pensions.

Burns responded that Abbey executives do not set their own pay, which is decided by a remuneration committee.

Also speaking at the AGM, chief executive Luqman Arnold tried to calm shareholder concerns by saying that the worst seemed to be over.

He says: “We have sold £50bn of the £60bn in our portfolio business unit. We believe the majority of our big losses have already happened. It is possible more losses will come but these will be substantially smaller.”