The rebranding of Abbey National

Abbey National, has unveiled plans for a complete overhaul of its brand and range of products this autumn.

The Abbey National bank announced a £144m loss before tax in the six months to 30 June, compared to £412m of profits in the same period last year.

Abbey's shares leapt 47.5p to 536.75p, making it the biggest mover in the FTSE 100.

Abbey has managed to claw back some of its dwindling market share in mortgage sales, with its proportion of net lending standing at 9.1 per cent of the market, compared with 6.3 per cent a year ago. Savings and credit cards were also slightly up.

Much of the boost in sales was achieved by slashing prices and reducing margins.

Source: The Independent 31 July 2003 (adapted)

Questions

  1. Outline THREE advantages to the brand-owner of having a successful brand.
  2. How are brands valued?
  3. Given the size of the loss, suggests reasons why the shares rose.
  4. Describe the main factors affecting the various shares of the mortgage market.
  5. How may a bank increase its share of the mortgage market - apart from by dropping the interest rate charged?
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