2:53pm UK, Monday May 01, 2006

The boss of Barclays has taken out a mortgage with rival HSBC, it has emerged.

Barclays chief executive John Varley mortgaged his £1.5m town-house in London with HSBC last year, according to the Sunday Times.

Boss banked with HSBC

The move came shortly after Mr Varley was promoted to the top job at Barclays.

The bank's finance director and deputy chairman were also said to have taken out mortgages elsewhere.

At the time Mr Varley took out his mortgage, HSBC's standard rate was 5.5% - more than a percentage point lower than the standard rate at Barclays.

The Sunday Times said the mortgage was taken out in January 2005, just four months after the 50-year-old became chief executive having spent 22 years at the bank.

Barclays said that the executives had been reluctant to take out mortgages elsewhere but did so to keep their personal finances private from colleagues.

A Barclays spokesman said: "While the directors would prefer to hold their mortgages with Barclays as the bank offers a range of competitive products, the level of disclosure of personal and family finances issues could be intrusive in their private lives."

The revelations follow criticism of chairman Matthew Barrett after an apparent gaffe in 2003 when he said that he never borrowed money by credit card because it was too expensive.

Last month, Barclays revealed that Mr Varley earned £2.9m in 2005 after the company banked record pre-tax profits of £5.28bn.