Sometimes it isn’t just the economy. A month before he resigned under pressure on July 19, Abbey National Group chief executive Ian Harley calmly assured Institutional Investor that the bank’s woes -- a first-half profit warning resulting from £256 million ($402 million) in write-downs, and a 21 percent decline in Abbey’s share price -- were more attributable to the miserable world economy than any missteps on his part.
“I feel blessed. I’ve no lack of faith in myself,” said Harley, 52, who in four years as CEO led the London-based mortgage bank into riskier wholesale lines like commercial lending and junk bonds that backfired. “What we’re seeing has more to do with the global macroeconomy. The U.S. is having its worst corporate debt cycle in 50 years.”
Harley lost much of his political capital with Abbey shareholders in early 2001 when he spurned a £13-a-share, £18.5 billion takeover bid by Lloyds TSB, after failing to consummate a friendly deal with Bank of Scotland. (Abbey stock has recently slipped below £7.) Even though U.K. regulators deemed the proposed Lloyds combination anticompetitive, stockholders asserted that Harley should have fought to get it done.
Before his recent travails Harley said he was most proud of “having changed the organization for the better. It’s a more open, more consultative, more involved organization. People enjoy working here.” Although he will no longer have that pleasure, the former CEO can take solace in at least £800,000 in severenance and bonuses.
