Takeover target Abbey National yesterday said it had made record results last year, with underlying profits topping £2bn for the first time in its history.

The group, which last week rejected a conditional £19bn takeover offer from Lloyds TSB, said underlying pre-tax profit had risen 17 per cent to £2.1bn.

Bottom-line pre-tax profits rose 11 per cent to £1.98bn.

Abbey said last year marked the eighth consecutive year of double-digit profit growth.

Ian Harley, chief executive, said: "2000 has been a year of radical change in which Abbey National has executed its plans on schedule, delivered industry-leading innovations, and provided genuine competition and choice for millions of customers.

"We enter 2001 in excellent shape, confident of our ability to continue to grow our business in the interests of shareholders, customers and staff.''

The record results - announced a week early - come in a time of uncertainty for the mortgage bank following its rebuffal of Lloyds' offer, which had gatecrashed Abbey's plans to merge with Bank of Scotland.

The bank has yet to give details of a planned merger with the Scottish bank, although this has been given regulatory clearance.

Mr Harley said the results had been achieved despite the distraction of the Lloyds' and Bank of Scotland situation.

He said the group had kept focused despite the high publicity surrounding Abbey's future.

Commenting on the effect the uncertainty was having on Abbey's staff, he said: "Increasingly, it is a distraction. People do read the papers and do worry about their future."

He said the last time Abbey had met Lloyds face-to-face was last Monday, while the bank was "meeting with Bank of Scotland all the time at different levels".

He added: "Bank of Scotland discussions continue but we are somewhat preoccupied with the Lloyds TSB situation."

Abbey said its retail banking division had posted a "strong underlying performance" over the year, with profits, including general insurance and Abbey National Life, rising five per cent to £1.3bn.

It said its mortgage net lending figure, of £3.2bn, was its best performance since 1994.

Shares in Abbey however dipped 18p to £12.07