Sallie Mae, the United States' largest student lender, on Monday named veteran banking industry executive Anthony P. Terracciano chairman of its board.

Former Sallie Mae chairman Albert L. Lord, who held that title for three weeks, has been appointed vice chairman and will remain chief executive officer of the company formally known as SLM Corp.

Shares of Sallie Mae have plummeted in recent months amid higher borrowing costs and the collapse of a US$25 billion buyout. The company also has slashed its year-end earnings forecast, held a special sale of stock to raise US$2.9 billion in cash and said it would cut back on its core business of making student loans because of market conditions and a new student-loan law that cut billions of dollars in federal subsidies.

Terracciano, 68, served as the former president of First Union Corp, now Wachovia, chairman and CEO of First Fidelity Bank Corp, president and chief operating officer of Mellon Bank, vice chairman of Chase Manhattan Bank, and non-executive chairman of both The Dime Bank and Riggs National Corp.

David Long, an analyst with William Blair & Company LLC, said he had never met Terracciano but had "no problem" with his appointment. The stock bump early Monday had more to do SLM shares dropping more than 10 per cent on Friday than the naming of a new chairman, he added.

Sallie Mae always has separated the chairman and CEO roles, except for the 62-year-old Lord's dual role in recent weeks.

John F. Remondi, 45, who most recently served as portfolio manager at investment manager Par Capital Management, has rejoined Sallie Mae as vice chairman and chief financial officer. The company's board now has 14 members.

Remondi, who originally joined Sallie Mae in 1999, helped the company's transformation from a government-sponsored entity to a fully private organisation. He replaces C.E. Andrews, who was chief financial officer until May and now serves as president.

- AP