Harley quits as Abbey CEO

LONDON, July 19 (Reuters) -- Struggling British mortgage bank Abbey National said on Friday that Chief Executive Ian Harley had quit with immediate effect, and Chairman Terence Burns would take on an executive role until a successor was found.

Harley has faced calls to resign after Britain's second-biggest mortgage lender issued a shock profit warning in June, sending its shares down to their lowest in nearly two years.

"This is a transitional year for the group as we respond to the challenges of changing markets,'' Burns said in a statement announcing Harley's resignation.

"Our priority now is to get the business back on track for growth and ensure we increase shareholder value.''

Abbey has lost about 40 percent of its value in the last year, and analysts see it as firmly in the sights of potential foreign bidders.

It has had to scale back corporate lending after problems in that business led to the June announcement that 2002 profits would fall well short of market expectations.

The company is also reviewing its portfolio of private equity investments and has restructured its wholesale division after its troubled foray into junk bonds.

National Australia Bank is reported to be considering a bid for Abbey, although industry sources have played down the prospects of a deal.

Abbey shares closed at 697 pence per share on Thursday, valuing the bank at 10 billion pounds (US$15.7 billion).