Position within the diversified Santander group Good asset quality Improved capitalization Improving efficiency Established market position Continued transformation and integration challenges Weaker earnings than peers' Relatively limited business diversity The ratings on Abbey National PLC--which operates under the trading name "Abbey"--are supported by its position in the Banco Santander Central Hispano, S.A. group (Santander; AA-/Positive/A-1+), its ongoing refocus on its core retail financial services competencies, and the benefits from its cost and efficiency programs. Abbey's retail loan portfolio is relatively low risk, reflecting the predominance of residential mortgages. Performance remains weaker than higher rated U.K. peers, but capitalization now compares better. Abbey was acquired by Santander in 2004, and is considered by Standard&Poor's Ratings Services to be a
