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Topics: Norwich and Peterborough
Anne Gunther, the former Standard Life Bank chief executive, will take over as head of troubled building society Norwich & Peterbourgh (N&P).
Gunther will join the society tomorrow, 20 April, after former chief executive Matthew Bullock stepped down on 31 March.
Bullock held the helm while N&P's in-branch advice arm mis-sold up to 3,200 customers investments in collapsed firm Keydata.
Former Standard Life Bank CEO Gunther is set to have her work cut out for her at the ailing mutual.
Yesterday the FSA fined N&P £1.4m for unsuitable advice related to Keydata products.
The building society must also make crippling compensation payments totalling £51m, but which could cost N&P up to £57m with fees and other costs.
N&P reported 2010 pre-tax profits of £5.1m, up from £1.3m in 2009. However once the cost of compensation is taken into account, this falls to an overal loss for the year £48.9m.
After the results announcement, Moody's downgraded N&P's bank financial strength to D- from D.
The building society transferred its network of 21 IFAs to Aviva in January, citing spiralling costs.
N&P is currently in exclusive takeover talks with larger rival Yorkshire, and a deal is expected soon.
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The crucial cost-benefit analysis
So inclusive of fees and costs this debacle will cost N&P £1.4m (fine) plus compensation for Keydata fiasco £57m so let us round up to £60 million. How much did N&P recieve in commission from the sales that should not have been sales in the first place ? Anyone any idea ? Sure as heck it was not £60 million. And these Directors are supposed to be 'custodians of the business' How on earth did they make their way to the Boardroom ? The FSA sopposedly have strict criteria for Approved Persons and Controlled Functions, as per the link below. Obviously this was NOT essential reading in Peterborough HQ and FSA did not check what was happening at N&P either. FSA do have a list of all the controlled functions and an explanation of each one, in Chapter 10 of the Supervision Manual (SUP) of our Handbook (http://www.fsahandbook.info/FSA/html/handbook/SUP/10).
Posted by: Graham