HSBC chairman returns from exile to offer some home truths

Lothian with the on-going merger of his Hongkong and Shanghai Bank with

the Midland.

Most exiles, particularly Scots, are not averse to playing up their

devotion to their origins, and Sir William fits the role of Border

reiver well enough. Hence the mock horror at the prospect of ''losing''

Berwickshire.

Almost 40 years of living in Hong Kong and climbing the corporate

ladder of the world's 10th biggest bank have eroded much of the Kelso

accent, but the Caledonian burr traditionally associated with top

doctors, engineers and financiers is still very evident.

Willie Purves -- Sir William since the New Year Honours -- was in

Glasgow this week to open the new Midland Bank branch. He also travelled

to Edinburgh to scold, albeit gently, the current generation of Scottish

entrepreneurs who appear to be failing in their God-given mission to

spread capitalism across the globe.

Speaking to The Herald in his first full interview since returning to

the UK, the chairman of HSBC bemoaned the air of business pessimism,

even hopelessness, which he thinks is prevalent in the country.

''I've only been back a few weeks, though I obviously have visited

Britain regularly, and I don't want to be too quick to judge. However,

there certainly seems to be an ebb in business confidence and a lack of

enterprising spirit at the moment.''

Such charges could never be levelled at Sir William who left Scotland

in 1954 to join the Hongkong and Shanghai Bank after war service in

Korea, where he was awarded the Distiguished Service Order for

gallantry.

His national service had given him his first glimpse of the Far East

and, like many compatriots before him, he fell under the spell of a

colourful region that had long offered high financial rewards to those

willing to take the corresponding risks.

''I have enjoyed a long career in probably the most exciting area of

the post-war world, and I insist that there are still as many

opportunities in the Far East now as there were when I started out.''

Chief executive of HSBC since 1986, Sir William stepped aside this

year to concentrate on the role of group chairman, just as the takeover

of Midland was completed. As part of the deal, the Bank of England

insisted that his office should be in London.

Almost 62 years old, he was due to come home to retire anyway so his

return has merely been brought forward a few years.

Since then it has not taken him long to find out that bankers, in

Britain anyway, are not exactly the flavour of the month.

''This won't change until we improve the services to our customers,

and the best way this can be done is by improving the computerised

systems currently in use,'' he said.

Far Eastern banks are far more advanced than the UK clearers in this

respect, though Britain appears to be finally catching up. ''The

Scottish banks in particular seem in better shape than those down south

as far as systems are concerned.''

Reminded that HSBC almost took over the Royal Bank of Scotland a

decade ago, Sir William admitted to the occasional what-might-have-been

daydream -- even hard-headed bankers indulge in these occasionally.

''You would have had the headquarters of the 10th largest bank in the

world in Scotland had that deal gone through,'' he insisted. Pointed

remarks about similar, ill-fated promises from Guinness met a cool

reception. ''They are not us,'' he snapped.

Describing someone like Sir William as tough, resourceful and wily is

redundant as nobody rises from the ranks to head the world's leading

trading bank by being weak and naive.

But he is widely known as a particularly single-minded financier who

is not afraid to speak his mind, as a black-tie audience of Edinburgh

financiers found out this week.

Defending his old stomping ground with a vengeance, he caused a

collective intake of breath by contrasting the West's ''slavish''

acceptance of Boris Yeltsin's recent crushing of a rebel uprising in

Moscow with the blanket condemnation of a ''similar but badly executed

restoration of order in Beijing in 1989''.

Most people would probably hesitate to describe the Tiananmen Square

massacre as a ''restoration of order'', and Sir William stressed during

the interview that he would not want to be perceived as an apologist for

the Chinese communist authorities.

Ironically, his DSO was won for bravery in the face of a Chinese

frontal assault which left him wounded.

''A realistic perspective must be maintained and any isolation of

China, the world's largest potential market, should be avoided,'' said

the ex-member of Hong Kong's executive council, the colony's main local

policy-making body.

With 17 branches in China and a firm commitment to retain the bank's

headquarters in Hong Kong after the 1997 handover, it is fair to assume

that HSBC will never be in the vanguard of any human rights campaign

targeted at Beijing.

Four decades of almost uninterrupted Asian exile have obviously left

their mark on the man who started his career as a teenager in his

hometown branch of the National Bank of Scotland.

Nonetheless, his relish for the less exotic task of lifting the

spirits of the struggling Midland Bank in his last few years before

retirement appears undimmed.

He said the Midland was currently undergoing a revamping of its

technology, an area which had not received the wisest investment before

the takeover.

''There are obviously problems marrying two different systems and two

different corporate cultures together, but we have made great progress

in only 14 months and I am convinced the long-term advantages will soon

emerge.''

Midland, once the UK's biggest bank, must devolve more decisions down

to branch level to get closer to the customer and impress on small

businesses that the debt problems of previous years have not left it

anti-risk.

Meanwhile, Sir William, never averse to the occasional risk himself,

will soon have to start contemplating a quiet life split between homes

in England, the Borders and the Highlands.

''I haven't thought much about what I'll do when I finally retire,

though I certainly won't be missing many Murrayfield matches.'' Spoken

like a true Borderer.