CEO Quits as Midland Bank Posts Big Loss
Midland Bank PLC said Tuesday that its chief executive is stepping down after announcing a net loss of about $346 million for 1990 and the first cut in the British bank’s dividend in about 60 years.
London-based Midland said Sir Kit McMahon will be replaced as chief executive today by Brian Pearse, who is Barclays Bank PLC’s deputy group chief executive and finance director.
Once the world’s largest bank, Midland has suffered through a British recession and a rise in business failures to record levels, after being weakened by massive losses on Third World loans in the late 1980s.
McMahon, 63, will also step down as chairman in June, to be replaced by Sir Peter Walters, deputy chairman of National Westminster Bank PLC. Walters has also been named Midland vice chairman in the interim, the bank said.
“It seemed to us that with people losing jobs, our customers suffering and earnings under pressure, it was appropriate to make a real reduction in the dividend,” McMahon said in a telephone interview.
The bank, the smallest of Britain’s big four banks, halved its 1990 payout to 17.5 cents. The dividend cut was deeper than expected.
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