mortgage bank Abbey National notched up nearly £1bn debt last year on the back of financial catastrophes such as the collapse of Enron.

The troubled finance house was forced to write off a substantial amount of bad debt - £95m in the case of Enron - and has since withdrawn from corporate lending.

The UK's second largest mortgage lender registered its first loss as a plc and was forced to slash its dividend to shareholders.

The move away from wholesale banking will leave it free to concentrate on its core strengths in personal finance - lending to members of the public looking for loans and mortgages.

Question marks now hang over the fate of the bank's 27,000 UK workforce.

Included in that figure are 550 employees at an Abbey National call centre in Stockton, Teesside.

The workforce there has the main role of processing mortgage and loan applications which falls in line with the bank's new strategy of concentrating on individual customers rather than courting large companies.

But a spokesman said it was too early to say whether or not jobs in Stockton would be safe: "The aspect of their work seems to fit part of strategy. Whether it will be still carried out in that location or moved elsewhere is too early to say."

Luqman Arnold, Abbey's chief executive, said it would take a "long, hard" three years to turn itself around.

He said: "It will be a long, hard process that we envisage spanning the next three years. When we have completed our three-year strategy we intend Abbey National to be esteemed by all its stakeholders for its positive value attributes."

The group showed the extent of its woes yesterday as it reported pre-tax losses of £984m for the year to December 31, against profits of £1.47bn the previous year, after figures were hit by costs of the disastrous move into wholesale banking.

It also slashed its dividend to shareholders, to 25p down from 50p last time.

Under the plan, it is to slash costs by £200m in its personal financial services businesses as well as seeking "extensive cost savings" in the businesses to be sold off or run down.

This is likely to involve job cuts, the group said. Staff reductions were most likely to come from back office and infrastructure roles, while customer facing and service areas were parts it wanted to build up.

It is to exit all its international operations and its troubled wholesale bank. It agreed earlier this month to sell the consumer finance unit of its First National business, another non-core operation.