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Should we sympathise with management at Clydesdale Bank?

IT is hard not to feel some sympathy for the poor old management of Clydesdale Bank.

That is not to say that Clydesdale has never put a foot wrong. In common with other banks, Clydesdale has been having to pay out very significant compensation to people who have claimed they were mis-sold payment protection insurance.

And it has found itself caught up in the storm over banks' selling of interest rate hedging products and tailored business loans to companies.

The firms which allege they have been laid low by the complex loan products are unlikely to feel much sympathy for the management of whatever bank sold these to them.

And we must recognise the considerable impact on businesses of banks' behaviour in this regard. We must also, while recognising that some PPI mis-selling claims may be more persuasive than others, acknowledge the scale of this problem from the perspective of the individuals who in many cases had to shell out many thousands of pounds to UK banks for something they did not need.

Meanwhile, the tens of thousands of people who have lost their jobs amid the never-ending restructuring in the UK banking sector would be unlikely to feel much sympathy for the top management in their organisations.

Royal Bank of Scotland chief executive Ross McEwan is embarking on yet another cost-cutting drive at his charge, with many branch managers and their deputies among those under threat. And Barclays has now unveiled plans for a further 19,000 job cuts.

Clydesdale chief executive David Thorburn yesterday appeared to hint the worst of the job cuts might now be behind his organisation, but also declared that "change never stops".

Many hundreds of people have lost their jobs at Clydesdale in recent years amid massive restructuring.

In spite of this backdrop, it is hard not to feel some sympathy for Mr Thorburn and his management team because, as well as being in the same boat as their counterparts at other banks in having to cope with a raft of difficult issues in a tough economic climate, they have had something extra to handle.

This additional something has come in the form of sometimes colourfully worded and very forthright comments from the top brass at Clydesdale's owner, National Australia Bank, about how they would dearly like to sell off the UK operations.

To be fair to NAB, its board is having to react to the views of investors and analysts Down Under.

For many years now, there has been chatter about the possibility that NAB might sell off Clydesdale. However, in recent years, this has at times seemed like it was building to a crescendo.

In 2011, NAB's then executive director of finance Mark Joiner declared: "Why do we need to bias our capital to the UK when the economy is expected to be on its knees for 10 years or so? There are growth opportunities in Australia."

But he added: "The market is at the bottom and so is … sterling. It is a rotten time to sell. There will be no fire sale."

The fact of the matter is that it has always been difficult to identify potential buyers for Clydesdale and its sister Yorkshire Bank, in no small measure because of these businesses' lack of a UK-wide branch network.

Lloyds Banking Group and Royal Bank of Scotland have, in line with disposal orders from the European Commission arising from their acceptance of state aid, tried very hard in recent years to find buyers for packages of branches concentrated in certain parts of the UK.

It speaks volumes that Lloyds has had to move to float the assets which it has been ordered to sell, including the Lloyds TSB Scotland branch network, having failed to find a trade buyer. These assets are being floated as TSB.

Likewise, RBS's planned sale of branches, many of them in north-west England, to Spanish bank Santander fell through. These are now being floated as Williams & Glyn.

In spite of all the evidence that there is a dearth of buyers, NAB continues to look for a sale of Clydesdale and Yorkshire.

There have been many times in recent years when, because of the time difference, the mornings of Clydesdale executives have been dominated by the fall-out from comments about the UK business made by NAB top brass while most people in Britain were sleeping. Clydesdale veterans have seen plenty of changes at the top of NAB over the decades. And there will be another change at the top this summer, when Cameron Clyne is succeeded as chief executive by Andrew Thorburn.

In case anyone was in any doubt, NAB chairman Michael Chaney has moved to make it plain that Clydesdale and Yorkshire remain as up-for-sale as ever, telling the Sydney Morning Herald last month: "I'm sure Andrew will be as diligent as Cameron in looking for opportunities to dispose of that business."

In a way, it is good to have clarity.

However, the drip-drip of comments from NAB directors over the years about just how much they would like to sell Clydesdale and Yorkshire must make life pretty tough for Mr Thorburn and his colleagues in charge of the UK operation, especially given the permanent uncertainty over future ownership for staff.

In this regard, we should sympathise with management and staff at Clydesdale and Yorkshire.

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