Terry Murden: Banks face winter of discontent

THERE will be an opportunity this week for MSPs to raise their concerns over the banks when Angela Knight, the sector's chief lobbyist, arrives at the parliament for a briefing on where we go from here.

The chief executive of the British Bankers' Association knows that she has her work cut out to heal the wounds of the crisis and to convince sceptics that the banks really care for the interests of their customers.

She is on a mission to heal the rift in relations that has seen the banks vilified by businesses, politicians and the wider public.

In Scotland she may find the bitterness and anger over the way the banks behaved and continue to frustrate customers combined with deep disappointment that two of the country's iconic companies let everybody down.

Two years on from the crisis that engulfed Royal Bank of Scotland and HBOS there are those calling for time to be called on hostilities, and with good reason. Whether or not the banks are too big to fail, they are certainly too important to fail. The economy would struggle without them.

Mark Tennant, chairman of Scottish Financial Enterprise, said at last week's annual dinner in Glasgow that the banking outlook had "hugely improved", noting in particular RBS's return to profitability and the positive prospects for the new banks, Tesco and Virgin Money, both based in Scotland.

Tennant gave a forceful defence of universal banks and called on politicians and commentators to stop referring to investment banks as casinos, describing the term, with tongue in cheek, as "undeserved flattery". After all, he said, casinos were exceptionally good at managing their risk.

But Tennant also warned that the banks were not out of the woods just yet. Just as the country is coming to terms with public sector cutbacks the banks will be dishing out the next round of bonuses.

Vince Cable, the Business Secretary, has already marked their cards on the bonus issue, providing a winter warm-up for another showdown in the new year.

A taste for LVMH

PAUL Walsh, chief executive of Diageo, already runs the world's biggest spirits company, but he'd love to get his hands on a few more top brands to stash away in his drinks cabinet. How about Moet & Chandon champagne or Glenmorangie scotch whisky, both owned by Louis Vuitton Moet Hennessy?

The emergence of huge global drinks groups means there are fewer opportunities these days to buy big brands, but LVMH's acquisition of a 17 per cent stake in Hermes last week has opened the door to Diageo.LVMH boss Bernard Arnault is said to prefer fashion accessories to drinks and Walsh sees his chance to acquire the 66 per cent of Moet Hennessy that Diageo does not own.

Diageo already distributes Moet Hennessy products through their partnership but full ownership would provide altogether different opportunities.

Walsh is faced with finding new channels for growth and he is eyeing expansion in emerging economies such as China and South America where there is a growing appetite for luxury branded goods.

Vote of confidence

ERNST & Young's plans for growth in Scotland are intriguing and must be regarded as a strong indication of a return of confidence. After all, who needs advisers unless there are deals to be done?