WOULD the millions of Abbey National savers and borrowers who in 1989 voted to turn their building society into a listed bank have been so enthusiastic about conversion if they had been able to peer 15 years into the future? Abbey’s time as a listed company, which ended yesterday, has been eventful, to say the least. But one turns the final page of the history of Abbey as an independent entity, thinking “what a waste”.

The Jeremiahs gave warning that Abbey was making a terrible mistake by turning its back on mutuality and seeking new fortunes in the Square Mile. And they have been proved at least half-right. As a mutual, Abbey sat in the vanguard of innovation and customer friendliness. It broke up the building societies’ interest rate-setting cartel. It was the first society to share its home valuation surveys with its customers. It was the first to offer interest on current accounts.

It is an awfully dispiriting contrast with the deeply troubling state that Abbey found itself in latterly. Abbey had become a byword for uncompetitive terms, branch closures, grotty surroundings, dreadful queues and spectacularly slow cheque clearance. Measured by its treatment of customers, Abbey’s bold experiment in popular capitalism was a failure. “Shabby Abbey” was an epithet most thoroughly deserved.

In terms of shareholder return, the verdict is more positive. From an issue price of 130p (and most of the shares were given away, of course) you couldn’t call yesterday’s 653½p closing price a failure for investors, especially given the fat dividends shareholders have enjoyed along the way.

All the good performance, however, was in the first two thirds of Abbey’s life as a quoted company. The past few years have been dismal. As the bell tolls on Abbey’s independent existence, the share price sits at half the level that it attained in early 2001 and only a few pence above the average price for the whole of Abbey’s 15-year life as a quoted company. The ambitious foray into wholesale banking turned out to be a disaster — not just because the bank ended up with billions in assets that it didn’t understand, but also because it led management to neglect the core savings and loans business.

It would be wrong to conclude that it was the pioneering conversion to plc, per se, that was responsible for Abbey’s later troubles. Plenty of other building societies have followed its path without the same mishaps. And at least some building societies that stuck with mutuality are hardly models of consumer friendliness or financial efficiency.

But the new freedom that allowed Abbey to diversify into new areas, combined with unfamiliar pressure from shareholders to produce growing returns, produced a lethal cocktail. And the notion that an organisation with 1.75 million shareholder customers would be consumer-savvy, and lead a sustained campaign to improve the service standards in retail financial services? Utter nonsense.

The last-minute abandonment of a merger proposal with National Westminster also deprived the FTSE of what would be the most marvellous name. While so many companies rebranded themselves with monikers such as Diageo and Invensys, the failure of this merger deprived us of Westminster Abbey as a quoted, British owned, national retail banking champion. That role, fortunately, has been taken up by others. Royal Bank of Scotland, the successful buyer of Natwest, has credentials in this regard. So does HBOS, the product of the successful merger between Halifax, Abbey’s age-old building society rival, and Bank of Scotland. Barclays and Lloyds TSB have pretensions to the crown too. And while HSBC has fingers in all sorts of pies around the world, its UK arm is no slouching also-ran.

Abbey’s final two years as an independent have been marked out with a series of whimpers. Under the auspices of Luqman Arnold, chief executive, and Terry Burns, chairman, the company appeared to conclude that the turnaround was too difficult to undertake independently. Abbey surrendered.

Customers, suppliers, employees and shareholders must now hope that Santander of Spain succeeds where the latter generations of Abbey managers failed. Santander’s Latin styles of management have raised prejudices in some quarters.

It may be, however, that Santanders’ Spanish practices are just what Abbey needs.

Taking the right medicine

IT WAS the turn of America’s all-powerful drugs regulator to reach for the headache tablets yesterday, as Eliot Spitzer launched a scathing attack on the watchdog for snuggling up to the companies it is supposed to be policing.

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