The chairman of troubled bank Abbey National has admitted it will take a turnaround on the profit and loss account to convince customers its change strategy is really working.

Speaking exclusively to the Telegraph & Argus, Lord Burns said customers were already beginning to benefit from the three-year programme to refocus the company on personal financial services.

The controversial strategy, which has also seen its high street banks renamed "Abbey", saw the directors come under fire from some shareholders at the annual meeting last week.

In a trading update on the same day, the bank - which made a £686 million loss in 2003 - warned the change process was harming current trading. But Lord Burns insisted: "Eighteen months ago this was a business suffering a huge amount from under-investment in its personal financial services and was running a very diversified business.

"We have reduced that by huge amounts and we have been building the foundations for the future.

"It will be a future that is based around retail financial services and we believe we have made real progress. However, we are not expecting that to show up in the figures until the second half of the year. I think people are already seeing the benefits in terms of performance but we have just been putting in place what was necessary."

Lord Burns, former Permanent Secretary to the Treasury, was speaking after addressing an audience about the future of the financial services industry at the Bradford Club as part of the One City Lunches programme.

He said the sector had to learn from retailers about the importance of offering products their customers wanted and selling them in a straightforward way.

"We have try to put customers at the centre of things," he said. "I think they are responding. Unfortunately, until we get through this period and it becomes clear we are making profits, people will not be fully satisfied."

Lord Burns also insisted the company, which has its northern headquarters in Bradford, remained fully committed to the city. Unions have criticised the decision to move some processing jobs overseas and claimed some senior posts had been moved from Bradford to London.

But he said: "Bradford is a very important place for Abbey. It is one of our biggest centres and we see it continuing to have a very important role in the future."