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Last Updated: Thursday, 22 January, 2004, 14:12 GMT
Abbey shake-up puts jobs at risk
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Abbey's fund management assets will be transferred to Boston.
Abbey is closing its Glasgow fund management arm, putting 170 jobs at risk, as part of its strategy of returning to traditional banking.

The mortgage lender confirmed that up to 60 posts would be lost in the next few months, with a question mark over the future of the remaining 110 posts.

Abbey started a three-year overhaul of its operations last year. It was forced to shake up its business after a foray into wholesale banking led to a 984m annual loss.

The latest job cuts will affect Glasgow-based Abbey National Asset Managers, the Abbey National Group Union (Angu) said.

Boston transfer

The jobs will go over the next few months as Abbey shuts down its active fund management arm in Glasgow.

Up to 60 jobs will be shed in the near-term, while "some other jobs" will be lost in the future as operations wind down, with redeployment being offered to some workers.

Abbey stressed that back-room staff and IT workers would not immediately be affected by the latest cuts.

In a statement, Abbey said it will no longer directly manage funds itself but will use a "multi-manager" approach, meaning external managers will be used instead.

Abbey's fund management unit oversees more than 29bn and employs 173 staff.

In this instance, its equity and bonds funds will be transferred to US group State Street in Boston.

Question of conflict

John Campbell, who is due to become chairman of Scottish Financial Enterprise, is a member of the State Street operating board, and unions are demanding to know whether there is a conflict of interest issue to be resolved.

"We will be seeking assurances from Scottish Financial Enterprise that there is no conflict of interest in the appointment of their new chairperson who works for an American company that is about to benefit substantially from Scottish job losses," said a spokesman for the Amicus union.

"We must talk through the problems now and ensure Scotland's place as one of Europe's oldest and most renowned financial management centres."

Last week, Abbey said it was closing the Edinburgh offices of its Scottish Provident operations, moving the work to Glasgow, impacting 900 staff.

The lender, which employs 23,000 staff in the UK, also announced plans to shut down offices in Warrington and Derby, with the loss of 400 jobs, moving some call centre jobs to India.

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