ABBEY has revealed that its restructuring plan will affect forecasted profits.

In a statement that was short on detail, the banking group said its annual figures would be in the black but told shareholders that further pressure on margins had left first quarter profits in personal finances slightly lower than the second half of last year.

The company is attempting to recover from two years of heavy losses by concentrating on its core business and selling non-core assets.

The decision came after Abbey recorded losses of £686m last year and £947m in 2002.

Luqman Arnold, chief executive, said the campaign remained on track and that the past 14 months of work would start to show signs of reward as the year wore on. He said: "It is tough work and is inevitably having some negative impact on current trading.

"We continue to drive the business hard as we push on with our plans. We believe that the huge changes we are making across the entire company will start to have a positive impact from the second half of the year."

Abbey did not provide figures in the first quarter trading statement, which was issued ahead of the company's annual meeting in London.

In the past, Abbey's performance has been hit by one-off costs, in particular relating to the company's exposure to risky corporate loans.

Those operations are now being sold off after being grouped together in a division called the Portfolio Business Unit.