Banks get it wrong again
When the medical crisis became a financial crisis, high Street banks were quick out of the traps to promise they would be there for small and medium sized business customers.
Precisely what that means is more difficult to fathom.
Long waits on the end of telephones for desperate entrepreneurs, demands for private assets as collateral, and warnings that when it is all over interest rates will zip up to 7pc to 12pc and in one case 20pc hardly represents best practice.
Most of the big banks employ sophisticated public affairs officers and have large communications teams to make sure they get governance and customer relations right. Yet this army of specialists and the senior executives at the top of the banks seem to lack basic judgement.
hiking overdraft charges in the middle of the potentially worst meltdown in the economy since the Great Depression was never going to be smart. nor was Barclays’ earlier decision to prevent people doing cash transactions in the Post Office, which was reversed under pressure. It has been one U-turn after another.
Amazingly there is still self-denial about past blunders. natwest owner RBS (which is behaving itself at present) still has not resolved some of the outstanding disputes from the venal activities of the Global Restructuring Group after the last crisis.
The recently released Cranston report on the hBOS Reading scandal made it plain that Lloyds bosses have never been fully transparent about their knowledge of the fraud which brought some clients to their knees.
Meanwhile, a whistleblower tells us that challenger bank Virgin Money is halting redundancies, which must be a good thing.
At the same time it is reportedly throwing hundreds of contractors and temporary workers to the wolves.
As the Bank of england likes to remind us, the banks went into the coronavirus health scare in better shape than the financial crisis. That’s comforting but not enough.
Difficult times require difficult decisions but banks appear blind to the optics.
Hanging on
ReVOLVInG doors in the boardroom are being gummed up by Covid-19. Latest to stay put is packaging group DS Smith’s finance director Adrian Marsh who was heading to bookies William hill.
he is not alone. Willie Walsh, who relishes a good battle whether it is with the unions, Richard Branson or government, is hanging on as chief executive of BA owner IAG. And City veteran nigel Rudd is staying with Meggitt at present as the aerospace firm navigates its way through the uncertainty, making some ventilators along the way.
Such decisions raise questions about other bosses on the move.
Mike Coupe is scheduled to step down at Sainsbury’s in June to make way for Simon Roberts. But is it the right time for Coupe or Dave Lewis, who has signalled his departure from Tesco, to move aside when the grocers are on the front line of keeping the nation from starving and serviced with toilet rolls?
At the Prudential, Paul Manduca is scheduled to make way for Shriti Vadera, currently at Santander UK. The Prudential – like all insurers – is facing some questions about the safety cushion of US offshoot Jackson Life at present. And with activist Dan Loeb knocking on the door it may not be the right moment for hasty changes.
elsewhere in the financial sector, Barclays is searching for a successor to chief executive Jes Staley, and Lloyds is considering the succession to Antonio horta-Osorio.
Changing captains in the midst of a raging storm does not look a sensible way to go.
Tenant power
hIGh Street and shopping centre landlords are not much loved with their upward only rent reviews.
With much of the high Street closed, the boot is on the other foot. Primark, which has closed most of its stores, is withholding rents. Trafford Park owner Intu, in a battle for survival, is warning that it is only in receipt of 29pc of rents due.
British Land has decided it is not worth a struggle in an emergency and is giving its smaller tenants a rent holiday and allowing bigger beasts to delay payment until the virus has passed.
This decision together with a dividend suspension sent BL shares tumbling.
That’s a decent farewell gesture from chief executive Chris Grigg who has signalled he will be leaving soon.
nice to see a softer and gentler side.