
Flawed risk management forces Abbey chief Harley to quit
Abbey has conducted a review of its wholesale operations under Mark Pain, its new wholesale banking managing director since October. Pain stepped forward from his role as finance director when then-head Gareth Jones took early retirement.
An Abbey spokesman told RiskNews the bank was moving from its previous ‘buy-and-hold’ strategy to a more active investment management philosophy. The bank intends to purchase assets, restructure them, then re-package them to sell to third-party investors. “For this we need a new skill set,” said Young.
Richard Williams, head of credit derivatives, has taken over as director of asset management and risk transfer, as part of the risk-reduction restructuring effort to win back shareholder confidence. Derivatives expert Williams joined Abbey in 2000 from CSFB, where he was head of the credit derivatives trading desk. His derivatives background will be ideal for the restructuring role, said the Abbey Spokesman.
Earlier this year, Abbey said it would report further losses from its wholesale banking business, saying overall profits before tax for the year were expected to be substantially lower than market expectations. These losses put further pressure on Harley, and increased speculation that the bank would be taken over, with National Australia Bank the most likely acquirer.
Abbey chairman Terence Burns has assumed the role of executive chairman pending the appointment of Harley’s replacement. Harley had consistently stated that Abbey should remain independent. His resignation has increased speculation that a takeover is likely to occur shortly.
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