Converting to a PLC
An Abbey National case study

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Page 1: Introduction

Abbey National is the UK’s second largest mortgage lender, helping over 2 million people to buy their homes. This lending is funded through the savings and investment accounts of some 12.5 million customers and through money raised on the wholesale funding markets. As well as its mortgage and savings operations, Abbey National offers a range of personal financial services including pensions and insurance.

Abbey National’s origins go back to the building society movement of the 19th Century, when a group of people would club together and pool their funds in order to buy every member of the group a home. The early societies were known as ‘terminating societies’, and would break up when every member had a house.

Abbey National 2 Diagram 2The next step was the development of ‘permanent societies’, where there were two groups of people - savers and borrowers. Savers put their money into the society and earned interest on the savings. Borrowers took out loans to buy houses (mortgages) and repaid them, with interest added on, over periods of 20 or 25 years. As a building society, Abbey National can trace its roots as far back as 1849. Two of the permanent societies were the:

  • National Building Society; and the
  • Abbey Road Society.

The two societies joined together to form the Abbey National Building Society in 1944. The Society’s head office was (and still is today) 221 Baker Street, also known as the home of Sherlock Holmes, hero of Arthur Conan Doyle’s famous detective stories.

Abbey National | Converting to a PLC