At a time when bankers are still portrayed as public enemy number one, Graeme Hartop's reputation is currently helping to raise tens of millions to fund Scotland's ambitious new private bank.
The 26-year career of the Borders rugby star-turned-Edinburgh-banker attests the virtues of traditional banking prudence, combined with a Teflon-like resilience.
He started out with Adam & Co and endured its near-collapse, joined start-up Scottish Widows Bank and survived its sale to Lloyds, then became managing director in 2003 and hit the banking crash. He not only survived, but led the bank profitably onwards, while previous start-up rivals such as egg, cahoot and Standard Life Bank faded.
Loading article content
After 19 years at Widows, Mr Hartop was headhunted by his old friend Ray Entwistle, the former Adam chief executive and chairman who in 2010 had hatched an apparently harebrained scheme to ignore the profession's leper status and launch a new bank.
Now Scoban's brass plate gleams in Charlotte Square, and it is poised to open the doors of the new (as yet unnamed) bank later this year, after a final 14 months of intense activity which began when Mr Hartop joined as managing director in early 2013.
He says: "I had a secure position in a successful business, but I had launched a bank once before in 1994 and it was the prospect of doing something similar again. I have just turned 50, it is a huge challenge to take on and a really exciting one."
Married with sons aged 19 and 15, the man who rubbed shoulders with Grand Slam winners in his young rugby days wants to emulate the results at Scottish Widows Bank where he drove profits from £8 million to £40m. "We continued to perform well through the downturn," he says. "Lending dried up quite markedly so we moved the focus to deposit raising activities and over a two-and-a-half-year period from the start of 2008 we increased the savings book from £2.5 billion to £9bn."
The banker says: "We all know how distressed banking in general has been over the last few years, and to start with a clean slate was a fantastic opportunity. The regulatory environment is important as well and there were signs that was improving - prior to that it was virtually impossible to get a banking licence as a new start-up. As I arrived, the language from the regulators was changing to give a more positive slant, but it is still a lengthy and challenging process to get a new licence and rightly so."
In April last year the Financial Services Authority disappeared, banking controls passed to the Prudential Regulation Authority, and the temperature began to thaw. Founder Mr Entwistle had envisaged the bank offering in-house wealth management, but that would have triggered a major added capital requirement. The bank, which had hoped to raise £10m from shareholders in 2012, had yet to reach £5m, and had been told it might need to raise £60m for banking alone.
Mr Hartop counselled simplicity. "My view was that it's difficult enough to get a banking licence without overlaying other things. We are now looking to raise £40m over the next couple of months, we have raised £8m to date, almost exclusively from individual shareholders."
Those 200 supporters are typically "company directors, chairmen, professional people, people from the arts, older people who have generally been successful in life and enjoy the private banking experience", Mr Hartop said.
Mr Entwistle had already taken the plunge on a long lease in Charlotte Square, but Mr Hartop had to then build a bank without burning too much cash.
When the doors open, the first new Scottish bank of the century should have some 45 staff, and it already has a mission to employ skilled professionals, and to train young bankers to old standards.
Mr Hartop says: "We are working closely with the Chartered Institute of Bankers in Scotland. What we really want to see is bringing that real professionalism back into banking."
The bank will trade on top people's willingness to pay well for the intimate personal service which has been crowded out by some institutions. A 2013 study found that those with £250,000 of investable assets excluding house and pension now number 1.4 million in the UK, a big proportion of them not with private banks.
The new bank is targeting a client base of "significantly below 1% of that at the end of year five, so there is a great opportunity there", Mr Hartop says, adding that private banks perform well over the long-term. "They have high-quality income streams which tend to recur, and high net worth individuals tend to perform much better even in downturns."
The new bank will not formally means-test clients, unlike Adam &Co, the RBS subsidiary a few doors along, which sets a £250,000 asset threshold to escape a £40 a month fee. "Our private bankers will meet potential clients and have a discussion around whether it makes sense," Mr Hartop says.
His bankers will service at most 200 clients apiece, will take most lending decisions themselves, and will offer an old-fashioned relationship - alongside online and digital options. "We will have older money, and younger people with a big capacity to do things over digital channels," Mr Hartop says. "We need to roll things out on a progressive basis, get the main banking platform up and running first."
He says the pampering ambience of Charlotte Square, and its London branch in upper-crust St James's, perhaps with uniformed commissionaires, is important, but adds: "The real key thing for us over the first couple of years is getting our service absolutely right, your early clients quickly become ambassadors for you."
The bank will make its money from the interest margin, the MD says. "We will have a very competitive offering out there compared with other private banks."
It expects to draw half its business from London, half from Edinburgh where its operations will be based.
On the rumpus over banking headquarters in an independent Scotland, Mr Hartop says: "It is an interpretation of European regulations. It is something that is causing some thought in other banks elsewhere....we have got an open mind but we are convinced we will be successful on both sides of the Border."