After a year's search, L&G poised to appoint Scots banker as chairman

Published on Friday 20 November 2009 21:20

INSURANCE giant Legal & General is poised to announce the appointment of Scots-born banker John Stewart as its new chairman.

Stewart was chief executive of National Australia Bank, owner of Clydesdale Bank, from February 2003 to December 2008.

One insider at NAB described his management approach as "approachable, genial, but decisive". Stewart is credited with turning around the Australian parent which had been brought low by a major forex scandal and a split boardroom.

Stewart, born in Gorgie, Edinburgh, had previous experience of managing turmoil. In the mid-1990s he took the helm of Woolwich Building Society when the previous chief executive Peter Robinson left under a cloud.

Stewart saw through the flotation of the society in 1997, and three years later sold Woolwich to Barclays at the top of the market for about 5 billion. He was appointed deputy chief executive of Barclays, with responsibility for private clients and personal financial services.

It is understood L&G will formally announce Stewart's appointment when he receives approval from the Financial Services Authority, which is expected imminently.

L&G has been looking for a replacement for chairman Sir Rob Margetts for just under a year. Margetts is planning to retire after leading the L&G board, where Tim Breedon is chief executive, for almost ten years.

Although Stewart is highly respected in banking circles, he is an unknown quantity to the British insurance sector.

One insurance analyst said yesterday: "I think the initial reaction will be fairly indifferent because not many people know him. But any qualms would be partly eased by the fact that Stewart obviously has a strong financial services pedigree."

The appointment of Margetts's replacement comes at a crucial time for L&G, as it is seen as one of the primary targets of Clive Cowdery's Resolution, formed to consolidate the UK insurance sector.

L&G's shares have fallen from a peak in February of 166.75p to a low of 20p after it doubled its reserves for credit losses in February and slashed its dividend in March. The shares closed down 1p at 84.1p yesterday.

Sir David Walker, the insurer's senior independent director, has struggled to pin down a successor despite looking at a series of candidates including Glen Moreno, chairman of Pearson, Ron Sandler, chairman of Northern Rock and Pearl Group and Sir Crispin Davis, former chairman of Reed Elsevier.

Earlier this year, friends of Stewart gathered at the Inner Temple in London to mark the Scot's "retirement", hosted by Sir Malcolm Williamson, NAB Europe chairman.