Important franchises in U.K. mortgage and savings markets; Satisfactory underlying profitability in retail financial services (excluding life assurance), with expected operational improvements; and Solid liquidity. Weak core capitalization; Continued transformation risk; and Weak overall profitability versus peers is expected to persist in 2004. The ratings on Abbey National PLC (which operates under the trading name "Abbey") are supported by its important position in the competitive U.K. savings and residential mortgage markets, its plans to refocus on its core retail financial services competencies, buoyant retail asset quality, good liquidity, the benefits expected to accrue from its cost and efficiency programs, improved management focus and execution, and measures to reduce its risk profile. The ratings are restrained by the continued heavy burden
