West Bromwich Building Society chief executive Stephen Karle has quit suddenly after just two years in charge of the £10 billion mutual.
News that the 48-year-old Mr Karle, one of the most prominent figures in West Midland business and finance circles, had resigned from his £379,000-a-year job took the region totally by surprise.
He was said to be on holiday in Austria after clearing his desk at the society’s headquarters in High Street, West Bromwich.
The society said it had no financial problems nor was it coming under scrutiny from the City regulators.
West Brom chairman Brian Woods-Scawen was adamant that Mr Karle’s departure was a personal issue and that the society, the country’s ninth biggest mutual, remained in sound health amid the global financial turmoil.
But the fact that Mr Karle will be succeeded as early as Monday by former Portman Building Society boss Robert Sharpe immediately gave rise to fresh speculation that the West Brom could be next in line to be taken over by a bigger mutual.
Mr Sharpe, aged 59, was the driving force behind the Portman’s takeover - and ultimate obliteration - of the old Wolverhampton-based Staffordshire BS in 2003.
The Portman itself disappeared in 2007 when it merged with the Nationwide, by a wide margin the country’s biggest mutual. Mr Sharpe was rumoured to have left with a £1.7 million golden handshake.
Nationwide recently absorbed the struggling Derbyshire and Cheshire societies and a warning by ratings agencies about the West Brom’s exposure to some “riskier” mortgage products gave rise to rumours that it could be the next to go.
The West Brom repeated denials given by Mr Karle in recent weeks that it was in takeover talks.
Mr Karle, a former solicitor who joined the West Brom nearly 14 years ago and rose through the ranks to take over as chief executive when Andrew Messenger retired at the age of 55 two years ago, had told the board some time ago that he wanted to leave.
He agreed to stay on until a successor had been appointed in order to achieve a seamless handover in a time of financial turmoil.
It was suggested to The Birmingham Post that Mr Karle’s fellow directors had been taken by surprise when he announced his intention to leave.
Indeed, only 13 days ago Mr Karle was arranging to have lunch with a business reporter from this newspaper on October 24.
When that was put to Mr Woods-Scawen he replied: “That doesn’t surprise me. It was Stephen’s wish to carry on as normal until such time as we had identified his successor, which we have now done.
“He would not have gone unless we had someone in place to take over immediately.”
The society said in a written statement: “Stephen Karle has overseen a period of development at West Bromwich Building Society and has been instrumental in both guiding the society through the turbulence of the last 12 months and repositioning it for the challenging environment expected over the medium term.”
Mr Woods-Scawen said: “We are extremely grateful to Stephen for all that he has done. He has made an important contribution to the success of our society.
“He leaves behind a strong business where members’ interests have been safeguarded. We wish him well for the future as he seeks new challenges. He will be missed by all his colleagues.”
Mr Woods-Scawen went on: “We are very fortunate to have secured the services of Robert Sharpe, who has an outstanding record in the financial services industry.
“The board believes that under Robert’s leadership, West Bromwich Building Society is in a strong position to weather the current turmoil in the financial markets.”
As recently as the September 29 the West Brom announced that it was pumping a further half a billion pounds into the West Midland mortgage market in a bid to help local homebuyers beat the credit crunch.
The money was to come out of the society’s own resources and reflected its success in attracting big inflows of deposits as savers looked for a safer home for their money, Mr Karle said at the time.
It was in addition to the £2.3 billion of gross lending that the society had on its books at the end of the last financial year on March 31.
Its 2007-08 financial results showed that ten years of solid growth under Andrew Messenger’s leadership had ended amid the growing financial turmoil. Profits before tax fell by 6.8 per cent to £41.1 million although total assets were 15 per cent up at £9.6 billion.
But Mr Karle said at the time of the results announcement in May that the society had performed “creditably” in the prevailing market conditions.