So why is the 51-year-old Arnold exchanging the high-powered world of global investment banking for the more mundane British retail and savings market, taking the helm of embattled U.K. building society Abbey National? The bank provides the strong brand and franchise that Arnold was seeking. “I don’t know anyone who doesn’t know Abbey National,” he says. “It’s an institution in Britain.”
Even more important for a man whose clash with Marcel Ospel forced his departure from UBS last December, Arnold starts with a healthy respect for his new chairman, Sir Terry Burns. Citing the intellectual strength and integrity of the onetime top Treasury administrator, Arnold says he is “really impressed by Burns. That became a major reason for joining.” Sir Terry -- who’d been working full-time since CEO Ian Harley resigned in July following major wholesale lending losses -- again becomes a part-time chairman.
Abbey rebuffed an unsolicited bid from Bank of Ireland last month, but to assure its independence and recover from the losses, it needs to refocus on its core U.K. consumer business. The £214 billion-in-assets ($333.4 billion), Abbey, founded in 1849, can better cross-sell products like mortgage insurance and investments, says Arnold, and more fully utilize its 756 branches: “Distribution is where you want to be.”
Arnold also needs to keep investors on his side. At UBS he won praise as an advocate for transparency, tight risk controls and shareholder rights. He hopes to do the same at Abbey, beginning with his own compensation package: In late October he bought about 109,000 Abbey shares for £675,000, equivalent to his annual salary, and will receive options to buy as much as four times that many shares if the bank meets earnings targets. He hopes the deal will set a benchmark for executive compensation in the U.K. and demonstrate his commitment to shareholders. “We actually need institutional support quite a lot,” he says.
