Nationwide hires BT Openreach boss as chief executive

By Steve Slater

LONDON (Reuters) - British mortgage lender Nationwide named former HSBC banker Joe Garner as chief executive on Monday, as the customer-owned group looks to take advantage of restructuring among the big stock market-listed banks who are its main competition.

Garner, 46, currently an executive at telecoms company BT Group, will succeed Graham Beale, Nationwide chief since 2007, who said in May he planned to step down in 2016. Garner will take over in the spring.

Garner's departure from his position as chief executive of BT's infrastructure business Openreach, which operates and maintains Britain's telecoms network, comes after just 21 months in the post and he leaves the 30,000-strong division at a tricky time.

The telecoms regulator has said it is considering a breakup of BT, including the spinning off of Openreach, after its rivals accused the dominant provider of abusing its market position, although many analysts do not expected it to go that far.

Openreach has been a strong performer for BT in recent quarters due to strong demand for superfast broadband lines, as BT built out its fibre network around the country.

"Openreach is a stronger and more customer-focused business as a result of (Garner's) leadership and he leaves it in good shape," said BT chief Gavin Patterson.

Nationwide sees itself as well positioned to capitalise on changes across Britain's banks, who have to separate their domestic retail banking operations from riskier areas such as investment banking from the start of 2019.

MAJOR RESTRUCTURING

That is expected to cause major restructuring and upheaval through the next three years, as well as substantial costs. Some lenders, including Lloyds and Nationwide, could benefit as they are less affected than rivals such as Barclays and HSBC, analysts say.

A triathlete who chairs the British Triathlon Foundation Trust, Garner worked at HSBC for eight years and was head of its UK business before leaving in February 2014 for Openreach, partly because he wanted to stay in Britain rather than work overseas.

He previously worked at retailer Dixons and consumer goods maker Procter and Gamble, and was chairman of the UK financial regulator's practitioner panel from 2011 to 2013.

Nationwide said Garner's remuneration package will be similar to that of Beale, who was paid 2.4 million pounds in the last financial year and has a base salary of 893,000.

Nationwide is Britain's second-biggest mortgage and savings provider and has 5.7 million current or checking accounts, making it the main challenger to the big listed banks from the mutually owned industry.

The group has 14 million members after bulking up with a series of mergers with other building societies, including buying Portman in 2007. It made a 1.04 billion pound ($1.6 billion) pretax profit in its 2014/15 financial year.

Beale guided the lender through the 2007-2009 financial crisis and launched a revamp of its branches and digital technologies.

(Additonal reporting by Aastha Agnihotri in Bengaluru and Kate Holton in London; Editing by Gopakumar Warrier and David Holmes)