A&L names new chairman

LONDON (Reuters) - Alliance & Leicester (A&L) (ALLL.L: Quote, Profile, Research) poached Alan Gillespie from Ulster Bank to take over as its chairman, the British bank said on Wednesday, as it attempts to stabilise in the face of a tough outlook.

Gillespie, who will take up his new post in September, has extensive experience in retail, commercial and investment banking, including 14 years at Goldman Sachs (GS.N: Quote, Profile, Research) in its corporate advisory and mergers & acquisition unit.

That previous career helped revive speculation A&L under Gillespie could be taken over or join up with smaller lenders, helping lift the bank's shares.

A&L's previous chairman Derek Higgs died in April. Its shares have plunged 79 percent in the last year to a record low as its funding costs have jumped and its earnings have fallen amid the credit crunch and tough UK housing market.

It has long been regarded as vulnerable to a takeover, with France's Credit Agricole (CAGR.PA: Quote, Profile, Research), Spain's Santander (SAN.MC: Quote, Profile, Research) and its bigger rivals such as Lloyds TSB (LLOY.L: Quote, Profile, Research) all rumoured to have cast an eye in recent years. Its market value has dipped to just under 1 billion pounds.

By 9:25 a.m. A&L shares were up 7.8 percent at 231.5 pence, which analysts attributed to the appointment of an experienced banker and a rebound across the European bank sector as well as the potential for M&A.

Gillespie, 57, became chairman of Ulster, a subsidiary of Royal Bank of Scotland (RBS.L: Quote, Profile, Research), in 2001. The native of Northern Ireland spent 10 years at Citigroup (C.N: Quote, Profile, Research), specialising in debt capital markets, before moving to Goldman, where he established and was co-head of the European financial institutions group.

He will take over as chairman on September 8, when acting chairman Roy Brown will revert to deputy chairman.

Gillespie said of A&L: "With its distinctive brand and customer franchise and broadly diversified retail and commercial banking businesses, it is well positioned to face the challenging times in the banking industry."