Lloyds' senior man in Scotland Philip Grant talks about the group's plans

THE white-emulsioned walls and black and chrome furniture offer few clues to the history of Philip Grant's workspace, a room that could lay claim to being the most prestigious office in Edinburgh.

In the corner an almost out-of-place antique time-piece by the city clockmaker Thomas Gordon provides a faint tick-tock rhythm to the many meetings it has shared with the likes of Sir Bruce Patullo and Sir Thomas Risk.

Grant, a 45-year-old career banker, searches its decorated face in vain for clues to its age. "It keeps very good time," he beams, noting that he is due shortly at another meeting.

He seems a little in awe of those who occupied the office before him and who stared out of this same window across to the National Galleries. "I started as a 17-year-old with Bank of Scotland and now here I am in the governor's office," he says. He resists punching the air, but his sense of triumph in climbing the greasy pole is clearly evident. He could almost serve as a poster boy for the Lloyds Banking Group's plans to re-define and re- energise itself after the traumas of recent years.

Grant is now Lloyds top operations man in Scotland, but he is not the latest in a long line of governors. That title belongs to Antonio Horta-Osorio, the Portuguese group chief executive, who replaced Eric Daniels in March and has swept through the bank like an Iberian whirlwind, blowing away whole tiers of management in his quest to reshape the business.

There were those who feared the former Santander UK boss would push Scotland down the pecking order of priorities and that the historic Bank of Scotland headquarters on The Mound would join the asset disposal programme.

In fact, his first visit to any part of the business was a unpublicised trip to Edinburgh soon after his appointment. He called in at a branch on the Royal Mile and at the headquarters of Scottish Widows. A visit to the latter would have been high on his list of things to do given the frenzy of speculation that suggested he would put it on the market.

"He quickly identified the distinctive role of Scotland within the group. Twenty per cent of the group's colleagues are here," says Grant whose elevation in Scotland is a result of the flatter management structure that saw the previous head of the Scotland operation, Archie Kane, move into retirement.

Grant is not a direct replacement for Kane, though he does succeed him as chairman of Lloyds' Scottish Executive Committee (SEC), a unique structure that brings together representatives of the various divisions and provides antennae for the board on what is going on north of the Border.

He looks like the perfect candidate, having progressed up the Scottish banking ladder, including nine years in the branch network during which he completed his banking qualifications. He is a keen advocate of professional training, which he regards as essential in rebuilding public trust and has just completed a two-year presidency of the Chartered Institute of Bankers in Scotland which he sees as an invaluable contributor to the sector.

His current title is managing director of UK private banking, but he has a raft of responsibilities. He is also treasurer of the Bank of Scotland so his signature appears on banknotes alongside that of Horta-Osorio.

Unlike Kane, Grant is not Scotland's representative on the main board - that role falls to Lord (Sandy) Leitch - but in his capacity as chair of the SEC he reports directly to Horta-Osorio and so is plugged in to the latest strategic thinking. However, he's not giving anything away on the disposal process - known as Project Verde - or adding much to what the bank has already said about the early recommendations of the Independent Commission on Banking (ICB) which was set up by the UK government to look at structures and competition. "We have made our views. We believe the package put together and endorsed by the European Commission makes a contribution to resetting the dynamics."

It's a tad management-speak, but it roughly translates as meaning the bank wants to press ahead with the sale of some businesses and be allowed to move on under its new structure. He also restates that any delay to the process by changing the "package" (the ICB is still pondering whether to call for more assets to be sold) would be distracting.

The asset disposals comprise the TSB brand, the Cheltenham & Gloucester mortgage and investment division, 185 branches of Lloyds TSB Scotland, a further 250 in England and Wales, and Intelligent Finance, the Edinburgh-based internet bank. The assets will create a bank with 632 branches, a 4.6 per cent share of the personal current account market and about 19 per cent of the group's mortgage business.

There remains some uncertainty over who will buy it after National Australia Bank became the latest to withdraw its interest, providing a personal blow to Horta-Osorio who saw it as the best candidate. With Virgin also going cold on Lloyds, the likelihood of a flotation of the business is looking a more solid option.

But Grant wants to talk about his role in delivering the strategy for what remains in Scotland and he's been well-briefed to emphasise the positives. He uses the word "focus" quite a lot or, by way of a change, "focusing".

There are also frequent mentions of "customer service". And, of course, there are no staff or employees, only "colleagues", reflecting the Lloyds view of unity and shared ambition. He could have said "we're all in this together" but someone beat him to it.

His loyalty seems genuine and unswerving enough or else he is very good at dodging questions about his innermost feelings when the walls seemed to be falling in. "The last few years have been difficult," he admits, betraying no sign of the alarm he must surely have felt during the dark days of 2008. His worst moment? "There were long periods of fundamental uncertainty. Colleagues [yup, them again] worked more intensely to manage an incredibly difficult situation. For a period of six months it was very distracting in terms of focusing [again] on what was important."

So did he feel any bitterness or resentment toward the HBOS management? After all, they came close to taking everybody down with them. He stares and smiles. And says nothing. We move on.

What will occupy his time and attention is the remodelling of Lloyds following the asset disposals. It will be kickstarted this weekend with some promotion for the 295 Bank of Scotland branches that Lloyds will retain.

"The critical thing for us as a group is to return to profit, focus on customer service [yes, yes] and repay the government's stake. In Scotland it is about investing and developing the brands and businesses."

He reveals that under these developments new life will be breathed into the Mound which will once again be used by customers, eight years after the then HBOS chief executive James Crosby announced plans to refurbish the building which led to the removal of the ground floor branch.

It will remain the head office of the bank in Scotland and the registered office of the group but in the past month there have been meetings with business customers and the bank is to relocate 80 staff [sorry, colleagues] from the wealth management division at Edinburgh Park who will repopulate the building and deal directly with customers.

"The private bank in Scotland will be run from here and we will turn this back into a customer building," says Grant. "It remains an iconic building and it is important it is used for what it was intended."