Board divisions paralysing Barclays

A FURIOUS row is raging at the top of Barclays Bank over the imminent appointment of Andrew Buxton as chairman.

Directors are also deeply divided over whether to cut the clearing bank's final dividend. The split in the board is paralysing the bank's decision-making process and is being blamed for a slowness to act on several issues.

Shareholders were dismayed last week when Barclays failed to make an announcement about its loans to Imry, the struggling property company, following its monthly board meeting on Thursday. With a total exposure of around pounds 350m to Imry, Barclays is expected to lose more than pounds 200m on the loan.

'This is an extraordinary situation,' said one source close to the Barclays board. 'It is surely a matter of material interest to shareholders.' Barclays said that it would make no announcement because it was still in refinancing talks with Imry.

The loan is thought to be by far the biggest made by a clearing bank to the property sector.

The board is split over whether Mr Buxton, the chief executive, should take over the chairmanship at the start of next year on top of his role as chief executive. Executive directors representing the clearing bank are understood to oppose the move, while those representing BZW, the securities arm, and several non-executive directors are behind Mr Buxton.

In a series of meetings over the last few weeks, Barclays has failed to persuade several large institutional shareholders to support the move. The shareholders are now worried that if the bank pushes ahead regardless with combining the two top positions, its share price will fall.

By way of compromise, Barclays has been suggesting that at some point in the future Mr Buxton may find the dual role too onerous and give up being chief executive. The institutions regard this attitude as absurd since it would be an admission that taking up the two roles had been a mistake from the beginning.

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