A successor to Hutchinson yet to be announced
Among those who were moved last month and have yet to start shaking things up again are Alison Hutchinson who has stepped down as chief executive of Kensington Group after four years at the helm, and Peter Richardson, erstwhile chief executive of Derbyshire Building Society, who announced his earlier retirement and has been replaced by non-executive director Graham Picken.
Each has left an interesting legacy. During her tenure at the top Hutchinson (right) saw the sale of the lender’s subsidiary Money Partners and its transition from a non-conforming to a prime lender. She also guided Kensington through its acquisition by South African investment bank Investec.
Richardson, whose move follows Moody’s decision to review the Derbyshire’s assets (it faces a possible downgrade thanks to its exposure to sub-prime business) masterminded a modernisation and diversification programme, including the creation of specialist lending arm, Salt, after years of the society sticking resolutely to the knitting under its previous chief executive, Roger Hollick .
Richardson’s successor, Graham Picken, has enjoyed a long and successful association with HSBC where he was executive chairman of First Direct and general manager, commercial and corporate banking.
For the record, on January 18 Moody’s announced that the Derbyshire had been put on its ‘watch list’ for a possible downgrade, although, according to the ratings agency, the society remains a good quality ‘A’ grade investment. Unlike Northern Rock, 83% of its mortgage lending is funded by customer deposits. Moody’s reference to ‘specialist segments’ of the UK mortgage market includes buy-to-let loans and self-certification mortgages. Derbyshire’s assets exceed £6bn and capital reserves total more than £240m.
Gregory goes at Britannia
Meanwhile a senior management reshuffle at Britannia, which saw Gerald Gregory (right), managing director of Britannia Capital Investment Group, being replaced by Group finance director Phil Lee on March 1, has revived speculation in the sector that all is not well at the UK’s second largest building society.
The fact that news of Gregory’s departure was followed shortly afterwards by the announcement that Platform, Britannia’s sub-prime subsidiary, was to be restructured (“to ensure it remains competitive when stability returns to the mortgage market”) further fuelled the boardroom chatter up and down the country.
The restructuring at Platform involves job cuts “in response to continuing difficult market conditions and the significant reduction in business volumes due to the closure of securitisation markets”.
David Tweedy, Platform’s managing director, said: “The impact is much less than we are seeing with most of our competitors but, nonetheless, it is likely that up to 65 colleagues from a total headcount of 305 will lose their jobs.”
Gregory’s empire embraced treasury, commercial lending, Platform, Britannia International, and Britannia Treasury Services. He effectively masterminded the society’s members’ reward scheme which has been largely funded by profits from Platform which had been acquired by Gregory and relies heavily on the capital markets for its funding. In November Britannia warned profits for 2007 were unlikely to exceed levels experienced in 2006 when membership rewards totalled £51m.
Still rockingMeanwhile on February 22 Northern Rock’s incoming executive chairman Ron Sandler hosted his first board meeting, following the lender’s nationalisation and used the occasion to unveil a number of new board members.
In addition to Sandler and NR’s newly appointed chief financial officer Ann Godbehere (who we announced as virtual appointments in our last issue, pending a decision on nationalisation) the board now comprises Philip Remnant (the government’s representative), Tom Scholar (Gordon Brown’s former chief of staff) and Stephen Hester (former finance director of Abbey) as non-executive directors. Hester becomes non-executive deputy chairman.
Bryan Sanderson, who succeeded the ill-fated Matt Ridley as chairman just a few months ago, and non-executive directors Sir Ian Gibson and Paul Thompson (Thompson led the unsuccessful management bid for Northern Rock) have retired from the board while David Jones, the bank’s former group finance director, has agreed to continue as part of the management team.
Andy Kuipers will remain on the board and continue as chief executive while Simon Laffin, John Devaney and Laurie Adams will continue as non-executive directors. Michael Queen, a managing director of 3i Group who has been on the Rock board since 2005, will also be retiring from the board as non-executive director, although he will remain a non-executive director for three months to help provide continuity.
Packing up in the packaging fraternity
Uncertain times are also being experienced in the packager fraternity, with The Professional Mortgage Packagers Alliance announcing that its managing director, Eddie Smith “is to leave to pursue other opportunities”. Smith (right) joined PMPA from rival packager body the Alliance of Mortgage Packagers and Distributors last August.
Vic Jannels, chairman of PMPA, said: “The industry is currently experiencing fundamental change and facing up to some significant challenges. Against this backdrop, the PMPA directors and Smith have mutually agreed to part.
“We remain on good terms and wish Smith every success in the future, and are grateful to him for the contribution he has made to PMPA. Smith’s main role within PMPA was to look at strategic developments within the market moving forward.”
PMPA said those opportunities and challenges had clearly changed in recent times and the directors and members of the Alliance would evaluate and the ongoing strategy in the light of current market movements.
News of Smith’s exit from PMPA was followed by confirmation that Bill Warren had been made redundant from the Regulatory Alliance of Mortgage Packagers as the group has scrapped its associate member tier.
Until now RAMP has had two types of members – founding members that are shareholders in the alliance, and associate members that do not hold shares but still benefit from access to exclusive deals arranged by the group. However, the alliance is understood to be scrapping the latter tier, resulting in the redundancy of Warren.