IT was a beguilingly old-fashioned image of banking presented by the RBS chief Stephen Hester last night.Penitent but dignified, as all banking bosses must be in these unforgiving times, Hester itemised progress made at the much-criticised institution since 2008 but also reiterated an acceptence of RBS's failings and those of the banking industry as a whole.
The definition of corporate success had become "dangerously narrowed" since the 1980s to focus on increasing profit, he said.
The ethos of the banking industry had become selfish, both personally and institutionally. Really good companies, by contrast, "serve their customers well", not just as individuals but as members of a wider community. Pay awards should reflect improvements in customer service, not just sales. Banks should articulate to employees what "doing the right thing" means, not merely stick a code of ethics on the company intranet. In short, "the role of good companies and good banks extends beyond the narrow pursuit of profit".
As a manifesto for the future of British banking, few even among the bank's most firebrand critics could find much fault with it.
It remains to be seen, however, whether this rather radical reimagining of the role of the British bank in societ, will be able to withstand the pressures upon it from those who aren't quite up to speed on the new thinking. If Mr Hester is to turn RBS into the banking equivalent of a much-loved benevolent uncle, he must find a way of striking a balance between the demands of shareholders for maximum profit (not forgetting that the British Government holds a £45bn holding in the bank) and the customers he believes the bank must regard as its true masters.
Mr Hester deserves credit for the changes he has wrought at the bank, which, he stressed, has increased capital ratios from 4% to over 10%, after having had a "wafer-thin" capital base at the time of the financial crash. Yet it must never be forgotten how many casualties there have been along the way, not least the thousands who have lost their jobs.
Public anger at the behaviour of banks has not quite abated, due in part to further scandals such as the fining of Barclays for attempts to manipulate Libor, the London Interbank Offered Rate (RBS is also under investigation around the world for its role in the Libor scandal). Mr Hester insists that the scandal represents "the bill for damages rendered", rather than evidence that there has been little progress in reforming the banks since the crash and he may well be right.
Taxpayers and bank customers, however, have aright to feel sceptical. Mr Hester has created a new vision of British banking that harks back to an era of probity and prudence, and is to be commended for it, but he will ultimately be judged, not on talking about it, but on whether he can deliver.
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