New blow for HBOS as Insight boss Ferrans prepares to abandon ship

News that Douglas Ferrans, the head of Insight Investment, is to quit will be a fresh blow for HBOS

BANKING giant HBOS was dealt a fresh blow last night after it was revealed that one of its most senior executives is to leave the company.

Douglas Ferrans, the head of Insight Investment – HBOS's £100 billion-plus fund management arm – will leave before the end of the year, The Scotsman has learned.

The loss of Ferrans, who is held in high regard in the banking world, will be seen as a serious blow for the Bank of Scotland/Halifax group as it tries to secure support for its £4bn rights issue.

There have been rumours inside the company that Ferrans was quitting after a disagreement with HBOS chief executive Andy Hornby and that lawyers were being called in to negotiate a pay-off.

However, an HBOS spokesman maintained yesterday that the departure of Ferrans, 53, was "all very amicable".

The spokesman added: "Dougie has made an outstanding contribution to Insight and HBOS. He spearheaded the launch of Insight and made it the success it is in the City today."

A formal announcement now would have been an embarrassment for HBOS in the middle of its rights issue, and so is likely to be delayed until later this summer.

Although his decision to step down will surprise many in the banking industry, it did not come as a shock to some observers.

One leading fund management industry figure said: "Dougie is a young, high-energy individual.

"This development doesn't surprise me as at his age most successful fund management bosses would probably think they have one big executive job left in them. Being non-executive obviously didn't press all his buttons."

It is believed Ferrans told Hornby and Colin Matthews, the board director in charge of HBOS's fund management, treasury and international operations, of his plans last month.

They apparently received the news with no great surprise. HBOS sources said the outgoing Insight boss had made clear that he regarded five years with any one organisation as enough and succession should be planned.

However, the departure of such a well-known figure is another setback to HBOS as it waits to see if its rights issue will be taken up by shareholders.

Ferrans, widely credited with doubling Insight's funds under management from just under £50bn to £107bn, was unavailable for comment yesterday.

Analysts said the news he is effectively on the market should lead to no shortage of job offers.

One said: "You wouldn't expect Ferrans to be on the shelf too long. He is widely seen as having done a good job."

scrutineer, page 34