Abbey has confirmed that it has put aside £373m in order to meet the new, stringent solvency rules of the industry regulator, the Financial Services Authority. The money has been set aside in respect of Scottish Mutual and Scottish Provident overall losses of £686m.
Abbey has not ruled out having to inject additional funds, should the Financial Services Authority make changes to its rules.
Our View
There has been considerable movement within Abbey and its subsidiary companies in terms of restructuring. Whilst additional reserves have had to be set aside, Abbey do not seem concerned. Abbey's Chief Executive said: - The trading results reported today are resilient and encouraging for the futureâ. We will see what the position is once all restructuring is completed.