It’s Japanese masters could never get their heads round tinsel town’s unique way of doing business – more shark pool than Sumo wrestling ring – and their vision of a unified consumer electronics and entertainment group fast degenerated into a dysfunctional conglomerate.In recent years, the two halves have seemed to be in positive conflict, with developments in digital consumer electronics cannibalising the profitability of the music interests. The difficulty the stock market has in putting a reliable valuation on Abbey is that the company still has little idea of how much capital it needs to fund its business, and how much from disposals might therefore be available to return to shareholders. There’s also little visibility on the trajectory of Abbey’s recovery.Only one thing remains clear. Less training means more employees behind their desks generating income.With the shares once again close to ten year lows, the jury is still very much out on whether Mr Arnold can succeed. The net margin between average deposit and lending rates will continue to deteriorate in the second half, but at a much slower pace than hitherto. For mortgages at least, the steady erosion of market share ought to come to an end.In June, many aspects of Mr Arnold’s programme of change draw to a conclusion, including the staff retraining initiatives that lie at the heart of Abbey’s strategy for generating renewed top line growth. The first is that the revenues Abbey derives from early redemption of mortgages are running lower than expected.

For the longer term, this is actually rather a good sign, for it means that fewer people are cashing in their Abbey mortgages early than had been the case. A second factor is that all the negative publicity surrounding Abbey has caused a falloff in sales of investment products. The third, and perhaps most important reason, is that Abbey has been forced to trim its standard variable mortgage rate by 35 basis points in order to make it competitive with leading rivals.With this so called “back book” problem now fully addressed, Mr Arnold believes he has established a solid grounding from which he can rebuild. Yet beneath the headlines, there’s good reason to believe Mr Arnold’s forecast of clear signs of improvement by the end of the second half might be vindicated.The latest bad news first There are three underlying causes.

It doesn’t have to be a second time.Together, the two businesses might be worth as much as £400m, or 160p a share. Any such return of capital might buy Ms Swann the time she needs to make the core, high street retailing business start firing on all cylinders again.Abbey NationalLuqman Arnold, or Mr Luqman as many shareholders insisted on calling the Abbey National chief executive at the company’s annual meeting yesterday, must have been expecting an earful, and that’s precisely what he got. Fourteen months into the mortgage lender’s turnaround strategy and there’s still more bad news than good to announce.The latest dollop of it is that despite a hugely costly restructuring, trading in the core retail deposit and lending business is still weaker than Abbey had been hoping for. Ms Swann is an opportunity to test run a different approach.Even so, she’ll have to do a lot more to deliver immediate value if she’s going to succeed.

One very obvious way of doing so would be to sell the Hodder Headline book publishing business and the news distribution arm. This is, after all, what any successful private equity bidder would do Lagard?, the French publishing group, is keen to buy Hodder. WH Smith has failed in the past to sell the news distribution business, but that was only because the sale was mishandled. WH Smith may prove to be the private equity bid that finally draws a line in the sand. Many fund managers are being made to feel ashamed of their bonus driven short termism.