Newspaper article The Evening Standard (London, England)

Irish Bid Is No Cure for Abbey

Newspaper article The Evening Standard (London, England)

Irish Bid Is No Cure for Abbey

Article excerpt


City Comment

BY A delicious irony, one Treasury mandarin-turnedbanker, Lord Burns, today finds himself in a very similar position to one briefly occupied by another Treasury mandarin and now banker, Sir Peter Middleton, a couple of years ago.

Burns at Abbey National and Middleton at Barclays both presided over the departure of their chief executives - Ian Harley and Martin Taylor respectively. They then had to run the banks themselves, while simultaneously trying to find a new chief executive and additionally ward off predatory competitors who saw the blood in the water and thought it an opportune time to launch a bid.

Middleton got through the period, facing down the potential bidders from north of the border, who eventually went for NatWest instead, and finding not one but two chief executives, although the first did resign after only one day.

That at least is something that Burns will be anxious to avoid, but if he does as well as Barclays in every other respect he will have reason to be well pleased.

At the moment, however, his problems are mounting.

The deal he announced last week whereby Abbey will sell Prudential's insurance products - itself an imitation of what Barclays did last year with Legal & General - makes it illogical to keep Scottish Mutual, though who would buy it in these markets is a moot point. The search for a chief executive has been stalled by the inability to tempt John Stewart from Barclays or Graham Poll from NatWest and looks likely to be resolved by the appointment of finance director Stephen Hester - which will no doubt raise criticisms of why the process took so long. But most pressing of all, Bank of Ireland today published a document in which it makes its case to buy Abbey.

The Irish may be serious but it remains hard to take them seriously. Clearly it is not as opportunistic as it first appeared, but one still gets the feeling that there can be no possible problems at Abbey National so bad that this Irish bid could be the solution. …

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