Abbey has announced a further 1,000 to 2,000 jobs will be cut this year.

As the company reported its first full-year results since it was taken over by Santander, chief executive Francisco Gomez-Roldan, broke the news.

Santander said Abbey had exceeded all its targets for 2005 and its ratio of costs to income fell to 60.6% from 69.9%. But it said more savings were needed to bring it in line with the industry average, estimated at 45 to 50%. “We will need some cost reductions that will affect employees, but in an amount much lower than last year,” Mr Gomez-Roldan said.

Around 4,000 staff have been axed since Santander took over Abbey in 2004.