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Analysts&#39 fears over Abbey as chief exec Harley leaves

Analysts are warning that the Abbey National group faces uncertainty until a new chief executive is found following the departure of Ian Harley last week.

Harley quit the troubled group, which includes Scottish Mutual and Scottish Provident, following a profit warning and loss of its AA rating in June.

Although the problems are mainly within Abbey&#39s wholesale banking and Treasury arms, one source says there is no logic in having two Scottish brands and a new chief executive will look at rationalisation.

Abbey says Harley stepped down after four years because of the bank&#39s disappointing performance. It says headhunters are urgently seeking a replacement.

Bear Stearns International analyst Mike Trippitt says: “A new chief executive will have the latitude to come in, throw away the strategy, accelerate the restructure of wholesale banking and cut dividends. But we have a long wait on our hands if the press statements are to be believed and the search has just started for a replacement.”

Another analyst says: “A lot will depend on who becomes the new chief exec. Until then, there will be a considerable amount of uncertainty surrounding the group. One option is to shut down the life business but this is unlikely as it is mega-efficient.”

Abbey spokesman Matt Young says: “The whole group has undergone a review and we have restructured the longterm savings division. We know where we are going and what we have to do.”

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