Ian Harley, chief executive of Abbey National, is about to embark on a gruelling series of meetings over the next week with institutional investors in a last-ditch attempt to save his position as head of the bank.
The move came as several institutional investors said Abbey's shares would rise if the bank were to replace Mr Harley with a credible external candidate. Yesterday they fell for the third day running, closing down 26p at 896p.
One of the main accusations Mr Harley will have to face is that he misled investors by repeatedly saying that the bank's prospects were good, just weeks before this week's shock warning that it will have to write off £400m of losses in its wholesale banking division.
A fund manager at a major Abbey shareholder said Mr Harley would have to wear a "hair shirt" as he did the rounds with investors. "People feel misled. Abbey said in meetings with institutions that the bank had reasonable growth prospects, fortunately some people began to treat these statements with scepticism," the manager said.
As well as briefing institutions, Abbey issued a statement on the same day as its annual meeting six weeks ago that said the group was trading in line with expectations. Mr Harley commented last October, when problems in the wholesale division were first emerging, that there were no more "black holes" in the business.
Mr Harley defended his position, saying the picture has changed because the economy has deteriorated in the last few weeks, especially in America.
But institutional shareholders are running out of patience with Mr Harley, who has been under pressure before to step down. David Hussey, an analyst at Barclays, said: "Investors' feet are beginning to tap. This is the last chance saloon for him."
Mr Harley was attacked by the City last year, when he fought a bid from Lloyds TSB. While the bid would probably have been blocked by the Competition Commission, investors now see no respite from Abbey's problems in the form of a merger because the failed Lloyds bid has made it immune from offers from other rivals.
Speculation is now centring on replacements for Mr Harley, including Mark Pain, who is in charge of Abbey's wholesale arm, and Andrew Pople, who runs retail banking.
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