Looks like a case for a little compromise over banking

It looks like Lloyds Banking Group is trying to head off at the pass the idea already mooted by the ICB that the bank should have to “substantially enhance” its branches divestment.

New Lloyds boss Antonio Horta‑Osorio is believed to have told the ICB that the bank could achieve the same thing by building up the deposit base of its Intelligent Finance internet bank by £5 billion before it flogs it off as part of the disposals programme demanded by Brussels in return for Lloyds’s taxpayer bailout.

It is clever finessing by Horta‑Osorio, but we will have to wait and see whether such a proposal will satisfy ICB chairman Sir John Vickers and his colleagues. For one thing, what guarantee is there that Lloyds would be able to grow IF’s deposit book by £5bn – and, crucially, keep those deposits – between now and 2013 in what is a very testing environment for banks?

It comes as John Cridland, director general of the CBI, has waded into the ICB debate with vigorous language, claiming it would be “barking mad” for the body to press ahead with its initial proposals to ringfence banks’ retail arms from riskier investment banking.

Cridland claims it would put British banks at a significant funding disadvantage in a very difficult business lending climate as gloom gathers around the economy less than two years after the end of the last recession.

The CBI boss, not mincing his words, claims “unilateral” UK changes to the banking playing fields could even endanger the fragile economic recovery. Cridland talks of “growth peril” and says it feels as if the latest looming crackdown on banks has as much to do with a political agenda for populist retribution on the industry as good economic sense.

Once again, the timing of this heavyweight business intervention is significant, clearly aimed at ratcheting up the pressure on the ICB in its final deliberations.

However, there is also a risk Lloyds’s apparent moves to avoid extra branch sell-offs and the CBI’s broadside could backfire.

There’s a chance the ICB will resent such public pressure being put on it so unsubtly and will bridle at attempts to push into a watered-down final report.

My own feeling is that there will be face‑saving compromise. The ICB may well do enough, on both standing its ground on ringfencing and insisting on an “enhanced” sel-loff by Lloyds, to show it has been truly independent and not neutered.

But it could well suggest on the contentious ringfencing issue such an extended timeframe on the regulatory change – 2019 has been suggested in some quarters – citing the fragility of the economy as the reason, that banks could feel they have won strong damage limitation.

Modern working with your latest flexible friend

TEMPORARY office space for peripatetic, have‑mobile‑will‑travel workers is becoming all the rage in these straitened economic times.

Office space supplier Regus, which has a strong Scottish presence, says cost‑conscious companies are increasingly moving staff from permanent sites to operate “out in the field”.

This has the advantage of avoiding redundancies, but keeping key staff on at far less cost. Proving its point, Regus has just announced a hefty increase in halftime profits and an eye‑catching three percentage point jump in margins to 20 per cent.

Such is its confidence, the group reckons it can double its presence in Scotland, where it currently has ten office space centres, over the next 12 to 18 months.

There have been very few winners in this extended economic downturn, which started from late 2007 onwards, as testing business conditions have afflicted both manufacturing and services.

But companies like Regus, which offer companies instant costcutting relief, are seeing the silver lining of the economic clouds. Flexible working is not just a buzz phrase, but a business opportunity.