Bank of Ireland has abandoned its attempt to buy the UK's sixth largest bank, Abbey National.

The Irish bank said it was dropping its takeover bid, citing Abbey's lack of co-operation.

"Given this position, the bank will not proceed with the proposal," Bank of Ireland (BoI) said.

Two weeks ago, Abbey National rejected the bid, saying it would not be in shareholders' best interests.

News of Bank of Ireland's retreat came hours after Abbey National said it had appointed former UBS Warburg president Luqman Arnold as its new chief executive.

And it prompted a slide in the price of Abbey shares, which had risen on hopes of a generous BoI offer.

Abbey National shares closed 61.5 pence, or 9.0%, down at 623.5p on Friday.

New boss

The bank has been without a chief executive since July, when Ian Harley left because of falling profits and a collapse in the bank's share price.

Mr Arnold faces a tough battle to revive Abbey's fortunes

The appointment of Mr Arnold was taken as a signal that Abbey National will continue its battle to remain independent.

National Australia Bank, which had also proposed a merger with Abbey, said last week it was no longer interested in pursuing the deal.

'Proven track record'

Mr Arnold worked at UBS between 1996 and 2001, and prior to being president he was the bank's chief financial officer.

He will take up his new position on 21 October.

Abbey's chairman, Lord Burns, said Mr Arnold had a "proven track record in managing complex businesses facing challenging times".

"Abbey National has a brand and franchise that provide an outstanding platform on which to develop a more competitive and profitable business," Mr Arnold said.

"I am greatly looking forward to leading the group's strategy and ensuring we place an even sharper focus on driving shareholder value."