Nationwide grabs BT Openreach boss for chief executive vacancy

Further uncertainty for the telecoms unit ahead of a review of its future

Joe Garner will make a return to banking. He previously held senior positions at HSBC (PA)

The head of BT’s engineering division will swap cables for current accounts after agreeing to become the chief executive of Nationwide, sparking further uncertainty for the telecoms unit ahead of a review of its future.

Joe Garner, who moved to Openreach only last February, replacing the current Severn Trent boss Liv Garfield, will take over from Graham Beale at Nationwide next spring.

The move will see the 46-year-old switch from running one of Britain’s biggest private-sector infrastructure companies to managing a co-operative building society owned by its members. His apparently unusual move actually marks a return to the industry. Mr Garner was previously chief executive of HSBC’s British bank until he stepped down in 2012 after eight years at the lender.

He was also deputy chief executive at HSBC, with roles which included operating the high-street favourites Marks &Spencer Bank, First Direct and the John Lewis Partnership Card. Before that, he worked at Dixons and Procter & Gamble.

He said: “The opportunity to become CEO of one of Britain’s most important financial institutions and service champions just proved too good to turn down.”

Mr Beale, who was appointed boss of Nationwide in 2007, had indicated earlier this year that he intended to step down. He has faced anger from some of the society’s 14 million members over his £2.57m pay packet last year. Nationwide, which made a pre-tax profit of £1bn in 2014, said Mr Garner would be paid “in line” with Mr Beale.

David Roberts, its chairman, said: “Joe is an exceptional leader and is exactly the right person to lead the society through the next chapter of its journey.”

Nationwide – along with a wave of other building societies – has been dubbed a challenger bank due to its desire to steal market share from large high street banks.

Lenders such as Clydesdale Bank and Williams & Glyn are plotting stock market listings next year to bolster their push, a trend which could revive calls for Nationwide to join the market. In late 1998, a proposal to demutualise was voted down, and a similar proposal was blocked by the board in 2001, although since then the emergence of challenger banks has changed the dynamics of the industry.

For BT, Mr Garner’s exit leaves Openreach without a leader at a critical juncture, as it awaits an Ofcom-led review into whether BT should be forced to hive off the infrastructure company.

Rivals including Sky and TalkTalk have lined up to accuse Openreach of poor service and installation delays. Both have called for a break-up of the group.

The BT chief executive, Gavin Patterson, said a successor would be named in due course ahead of Mr Garner’s departure next year.

Ofcom is carrying out a review of the telecoms market – including “tackling obstacles or bottlenecks” – and is set to report early next year.