Abbey chief in fight for survival

Heather Tomlinson
Sunday 16 June 2002 00:00 BST
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Abbey National's chief executive, Ian Harley, is to fight to keep his job this week as he meets the company's three largest investors to head off demands for his resignation.

There was speculation over Mr Harley's future all through last week following Monday's statement that profits this year will be "substantially lower" than market expectations.

This is due to a poor performance from Abbey National's wholesale banking division, which offers commercial products like private equity, asset financing and junk bond investment.

The meetings are expected to be with Barclays Global Investors, Fidelity Investment and Legal & General, which each own around 3 per cent of Abbey National's shares.

"He may not have too long, although he still has a chance to make persuasive arguments to shareholders," said one institutional investor, who declined to be named.

"The industry is doing well, but Abbey isn't. [Ian Harley] can't blame it on general industry factors."

Another shareholder said: "We are monitoring developments very carefully. You can reasonably infer that confidence is at a wafer-thin level so far as the company and its management are concerned."

However, an Abbey National insider said that rumours of Mr Harley quitting were overblown: "He is not the sort of guy to pack his bags and walk away from problems."

The company's shares fell 19 per cent last week to finish at £8.10, their lowest level for nearly two years.

If Mr Harley fails to persuade the investors of his merits, it is expected they will start lobbying for his removal late this week.

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