Comment: Casino Royal is no more fallible than retail banks
TWO steps forward, one step back. Or is it the other way around? In the banking world nobody knows for sure whether progress is being made or not.
Royal Bank of Scotland chief executive Stephen Hester is desperate for the recovery story to kick in, telling everyone he meets that the worst is over, yet he cannot shake off the chains that bind him and prevent him from properly engaging in a growth plan.
Put simply, too many legacy issues are yet to be resolved, from Libor-rigging to the legal action by shareholders, which we report on today, and whose reach is likely to be extended to include more former executives.
Barclays last week set aside a further £700 million for payment protection insurance claims. On Friday came news that Bank of Scotland had been fined £4.2m for failing to keep proper mortgage records, a cock-up that carried on over several years and which once again highlights the difficulties in integrating IT systems.
Lloyds has already spent more than £3 billion merging its acquisitions yet there remain outstanding issues to be resolved. Maybe Santander was right to call time on its purchase of 316 RBS branches over IT concerns.
Beyond technical matters, it seems the banks cannot avoid stepping on landmines. In these days of multi-billion pound fines and losses, a £4.2m penalty is pretty modest. But the Bank of Scotland’s blundering affected 250,000 customers and exposed a level of chaos in managing their accounts that should remind those who attack the “casino” banks that retail banks are no angels.
Benefits from Chanel’s Barrie buy
MUCH better news for the textiles industry last week with the sale of Barrie Knitwear to the French company, Chanel.
Many obituaries have been written about the textiles sector, largely on the assumption that, however good we are at making clothing, we will never be able to compete on price.
Well, price isn’t everything and, as we report opposite, Chanel has recognised that the quality of the Borders’ workforce is something the company was prepared to pay for.
The two firms have enjoyed a 25-year relationship but with the change of ownership Barrie is now free from Dawson International’s problems, which plunged the company into administration, and can now benefit from the global reach of one of the world’s biggest luxury brands.
Aggreko’s year of living vicariously
A SEVEN per cent slide in Aggreko shares on Friday was enough to prompt questions about whether the bubble had burst after their stellar run in recent times. The answer is almost certainly: no, but tread carefully.
The temporary power firm’s profit warning was clearly a setback. Highlighting bad debt due to late payments and the impact of currency rates is not what investors want to hear.
However, the underlying figures are still positive. Revenue rose 22 per cent in the past quarter and the company has a global spread of business that means it can focus activity in those areas of the world that are growing.
One slight concern is that, after a year of European football championships, Olympics and Paralympics there are no major sporting events in 2013. This will task Aggreko’s sales force with an extra challenge as the company looks to resume its involvement in the sporting bonanza in the following year.
Search for a job
Search for a car
Search for a house
Weather for Edinburgh
Tuesday 21 May 2013
Temperature: 6 C to 17 C
Wind Speed: 12 mph
Wind direction: North east
Temperature: 3 C to 13 C
Wind Speed: 23 mph
Wind direction: North west