Shares dive as Barclays chief quits

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The Independent Online
More than pounds 2bn was wiped off the stock market value of the high- street bank Barclays yesterday after Martin Taylor, widely regarded as one of Britain's most promising business leaders, resigned as chief executive.

His departure, with a pounds 1m-plus pay-off, came after mounting tension at the top of the bank and prompted feverish speculation that the crisis could open the way to a takeover bid by Lloyds TSB, its clearing bank rival.

Colleagues said that Mr Taylor had made up his mind to leave last weekend and had briefed senior executives on his decision earlier this week. "He was being blocked on everything he wanted to do. He was feeling increasingly frustrated," one insider said.

Mr Taylor's resignation was accepted at an emotional board meeting at Barclays' headquarters in the City of London on Thursday evening and then announced to stunned investors first thing yesterday morning.

Mr Taylor's position at the bank has been undermined in recent months by a series of setbacks, included a pounds 250m charge against profits to cover lending to Russia, and enforced participation in the $3.75bn (pounds 2.3bn) bail-out of the troubled American hedge fund, Long-Term Capital Management.

Talk within the bank yesterday was that the final straw for Mr Taylor was a decision by fellow board members to veto his plans to mount a takeover bid for Halifax, the building society turned bank. Mr Taylor said yesterday: "This has been coming for a while. Crucially it is about my ability to get things done."

With his designer clothes and intellectually driven approach to banking, Mr Taylor found himself out of place and increasingly isolated in the sober environment of the Barclays machine.

The resignation caught the City by surprise. Within minutes of the announcement, heavy selling had wiped pounds 2bn off the bank's market value. It closed at pounds 13.74, down pounds 1.14 on the day. Analysts said the fact that Mr Taylor had left so suddenly and with no clear successor meant the bank was highly vulnerable to a takeover bid, with Lloyds TSB heading the queue.

Mr Taylor's place will be taken by Sir Peter Middleton, 62, a former senior Treasury official, until a successor is found.

Andrew Buxton, Barclays chairman, said Mr Taylor had been "restless" for some time. "It has been a difficult and controversial year. Obviously he was under a lot of stress," Mr Buxton said. "I can say hand on heart that there was not one single issue that led to his going. There was a build-up."

Sir Peter said he had known that Mr Taylor wanted to leave for at least a year. "He wouldn't have gone if he felt he could achieve more. Once he'd made up his mind it was a question of what has to be done is best done quickly," he said.

Mr Taylor, 46, was considered one of Britain's brightest businessmen when he joined Barclays in 1993. He is also well connected in New Labour circles, having agreed after the election last May to head Labour's tax and benefit review.

Colleagues said he had made up his mind finally to go earlier in the week but had been prevented from formally tendering his resignation until a meeting of the full Barclays Bank board could be convened.

Barclays vigorously denied suggestions that Mr Taylor's sudden departure was prompted by either a sexual or financial scandal, or that any black hole had emerged in its accounts. The bank also denied suggestions of a boardroom rift. However, the bank did acknowledge that profits this year will be pounds 1.9bn, well short of City expectations.

Colleagues said that, as far as they knew, Mr Taylor had no other job lined up. A former journalist with the Financial Times, he had spoken in the past of pursuing an academic career.

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