BANKING giant Abbey National could be set to reduce staff numbers by up to 3,000 as part of a cost-cutting drive.

Abbey is reportedly considering the move - equivalent to around one-tenth of its workforce, in order to save £100m.

Britain's sixth largest bank has already said it is looking for tighter control of costs after a gruelling few months in which half-year profits dropped 34 per cent and it parted company with chief executive Ian Harley.

Abbey National has confirmed a review of costs was still taking place but said it was too early to comment on the likely outcome.

"It is unlikely we will avoid redundancies but as yet there's no sense as to what the number will be," said a spokeswoman.

Abbey National's recent problems stem from its involvement in high-risk corporate lending in the United States.

Interim pre-tax profits fell after the group reported a £208m increase in the amount it took to cover bad loans in its troubled corporate-based wholesale bank.