CLYDESDALE Bank’s new boss, David Duffy, says he is “passionate” to retain it as an independent challenger bank to take on the UK lending sector’s big beasts. The epithet has resonance, and not just because many people these days seem to feel it is a statutory obligation to be passionate about something, even if it is only a coffee chain making coffee or the value of corporate communications.
No, Duffy’s aim is laudable, and households and small businesses, in particular, will welcome him to the helm of Clydesdale and its sister group, Yorkshire Bank. They will wish him success in giving the major players a run for their money in every sense.
But, without wishing to create a hostage to fortune, it has to be said that the language about being robustly standalone and a consumer champion in UK banking stirs a few memories, some extremely recent.
It is almost the exact language used by Paul Pester, chief executive of TSB, the bank floated on the stock market last June before agreeing a £1.7 billion takeover by Spanish bank Sabadell two months ago.
Going back further, Halifax Bank of Scotland (HBOS) used to regularly proclaim its “outsider”, consumer-champion status in taking on the big four of British banking. Until it came a cropper in that financial dustbowl year of 2008, and HBOS had to be rescued, ironically by one of those big four, Lloyds, and later the taxpayer.
Going even further back, Abbey National, Alliance & Leicester and Bradford & Bingley all used to shout their independent status from the rooftops. Until Spanish bank Santander snapped up all three over a matter of years either side of the financial crash.
This is not to say Clydesdale and Yorkshire banks are necessarily likely to lose their independence.
That will depend on how well Duffy runs what is essentially a solid franchise which lost its way in flaky property loans and mis-selling scandals, thereby exhausting the patience of exiting parent, National Australia Bank.
He certainly has good credentials, having cleaned up the Augean stables balance sheet that was Allied Irish Banks in the wake of the financial crisis, and got profitable momentum going again.
But it is noticeable how plans for a flotation in banking and other industries can bring potential trade buyers and private equity out of the woodwork, both before and after the stock market shilling is taken.
Of course, it is not a one-way argument. Nimble, challenger banks succumbing to new ownership maintain that they can achieve volume and market share gains to take on the big boys faster and more smoothly through access to a bigger owner’s deeper pockets. But it does swap small and beautiful for the matrix corporate structure again.
It doesn’t invalidate the independent, standalone argument but shows lines can get blurred. Hopefully, it won’t happen with Clydesdale.
Time’s up for Fifa
FIFA has lost it, and it’s not even gone to penalties. Yet. But the FBI is mightily impressively on the case, business sponsors like Visa and Nike are threatening to pull the rug, and the game is surely up for an organisation that has impressively melded corruption and incompetence for decades.
Under the unconscionable stewardship of the risibly odious Sepp Blatter, football’s family has been shown to be much like the one in The Godfather, but minus the classy dialogue.