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Thursday, 15 November, 2001, 09:15 GMT
Abbey gets new chairman
Lord Burns
Lord Burns has a reputation for handling politically-sensitive situations
Abbey National chairman Lord Tugendhat is stepping down after 10 years in order to join Lehman Brothers bank.

He will be replaced by former Treasury mandarin Lords Burns, chairman of Glas Cymru, the not-for-profit trust which took over privatised utility Welsh Water earlier this year.

Lord Tugendhat
Tugendhat: ten years with Abbey

Lord Burns retired from the Treasury in 1998, where he was permanent-secretary to Chancellor Gordon Brown.

During his 11 years at the Treasury, he gained a reputation for dealing with complex and politically-sensitive problems, experience he later put to use as head of the government's inquiry into fox hunting.

He then went on to replace Dame Helena Shovelton as chairman of the Lottery Commission in October 2000, for a year.

Abbey National shares were up 2.5% at 1040 in early trading, on news of Lord Burns' appointment.

'Wide-ranging experience'

Lord Burns will remain as chairman of Glas Cymru, whose take-over of debt-hobbled Welsh Water has been touted as a model for the government's planned transfer of collapsed rail operator Railtrack's assets into a not-for-profit company.

The grammar-school educated peer is also non executive director of media giant Pearson and British Land and a former non-executive director of Legal and General.

Abbey National praised Lord Burns' "wide-ranging experience in financial services and economics."

In a statement, Lord Burns said: "Abbey National has a superb franchise and a great track record.

"I am looking forward immensely to my new role."

'Great company'

Lord Tugendhat is to become non-executive European chairman at Lehman Brothers, which advised Abbey during its failed attempt to buy Bank of Scotland.

It also defended Abbey from a hostile take-over bid by Lloyds TSB, which was eventually blocked by regulators.

In a statement, Lord Tugendhat said: "Abbey National is a great company. I have enjoyed my time with it enormously.

"I am also proud to have contributed to its rapid profit growth and evolution from a pure mortgage and savings operation into a widely-diversified major financial institution."

Sensitive time

Lord Tugendhat is a former financial journalist and Conservative MP for the City of London and Westminster South.

He is also a former European Commissioner and chairman of the Civil Aviation Authority and a former chairman of Blue Circle.

He told the Financial Times newspaper he would stay as chairman at Abbey until the first quarter of next year.

The move comes at a sensitive time for Abbey, which is restructuring its wholesale division following losses on its US junk bond portfolio.

Ian Harley, chief executive of Abbey National, said he was "absolutely delighted" to welcome Lord Burns to Abbey National.

"His broad range of skills, particularly in the financial arena, will be invaluable in taking the business forward."

See also:

23 Oct 01 | Business
Abbey National stays on track
12 Oct 00 | UK
Burns gets top lottery job
11 Jul 01 | Wales
Final go-ahead for Glas Cymru
23 Feb 01 | Business
Lloyds TSB bid under scrutiny
14 Feb 01 | Business
The battle for Abbey National
11 Apr 01 | Health
Vacuum firm rapped over advert
01 Feb 01 | Business
BoS 'in rival bid' for Abbey
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