Morning:
8°c
As the football season draws to a close — it must be because it's raining at Lords, halting the First Test — and the football writers ponder their final vote for next week's award, I think we need a team assessment of the UK banks.
The banking crisis is over. We hope. It ran twice as long as a normal football season — for 20 months, rather than 10. British banks, like British teams, had varying levels of success and failure. As in football, some well-known owners and managers have switched teams or departed altogether.
Here, then, is my end-of-season Banking Premiership league table (which for obvious reasons cannot be sponsored by Barclays). Any resemblance to Premiership football clubs, owners, managers or even players is purely coincidental.
London-based but very much focused on its emerging Asian youth team. Two-thirds of revenues come from the region, which manager Peter Sands accurately predicted would have a “shorter and shallower” recession to the US and Europe.
One major slip-up when its $7.1 billion structured investment vehicle was put into administration in February 2008. However, that was more of an embarrassment than a major financial hit. Worthy winners.
A chairman-manager relationship that is the envy of many, though criticised by some for being too close. The first British bank to blow the whistle on the US subprime mortgage dangers that started the whole credit crisis.
Some critics argue it has spent too much of senior management and coaching staff's time sorting out its problems in the US soccer league and should, like David Beckham, simply have walked away when it knew it wasn't working. The rest of the business is more than sound. Deserved its runners-up medal.
Barclays
A runaway performance at the end of the season, and if this table was determined by share-price performance in the last three months alone, Barclays would have won. But that would be to ignore £8 billion of writedowns last year and fears there is still too much toxicity on the balance sheet.
Manager John Varley kept together a seasoned team including Bob Diamond and Fritz Seeger, who moved quickly to exploit opponents' weaknesses. Barclays fans were ecstatic when it put up two fingers to a Government bailout. A strong performance in today's game.
Abbey
Acquired by a rich foreign owner, Spain's Santander, five years ago, it has used the credit crunch to dip into his pockets to snap up rivals Alliance & Leicester and parts of Bradford & Bingley. Portuguese manager Antonio Horta-Osorio showed Brit rivals how to deal with the authorities when he handled the Treasury Select inquisition politely but firmly. Impressed fans last month with news bad debts are falling as customers handle money troubles better.
Nationwide
Manager Graham Beale loses no opportunity to bang on about the benefits of mutuality during the credit crunch. His institution's losses were only in the hundreds of millions of pounds, not billions.
Nationwide has also played a useful role sweeping up lower league financial institutions like Cheshire, Derbyshire and Dunfermline which were on the brink of failing. But has Nationwide drawn in its firepower in the mortgage market too much?
Co-op/Britannia
A mid-season merger deal that is an astute move to pick up journeymen players at a good price or prevents one or both of them being relegated. Never too exciting and unlikely to achieve much more than a mid-table place. But has a couple of long-throw specialist attractions in its attitude to ethical investment and the top-rated internet bank Smile. Smart sponsorship by Britannia.
What's a Scottish bank doing in the Premiership? Scottish manager Fred Goodwin, known for his hairdryer attacks on players, was ousted after his appalling decision to buy large chunks of Dutch side ABN Amro. The UK taxpayer now owns 70%, so don't expect any more pricey transfer deals for some time. New manager Stephen Hester is a safe pair of hands who will concentrate on avoiding relegation and rebuilding the fan base.
Still huge pressure on former tabloid newspaper chairman Victor Blank and Yankee manager Eric Daniels. Will they survive June's annual meeting?
Having received the equivalent of the Football Association's blessing, they took over rival side HBOS. Bang went the dividend. Bang went the bonuses. Bang went the profits. Could still struggle to avoid full nationalisation. Bottom of the table.
HBOS
Everyone denied it was in trouble —several times. But a combination of a collapsing housing market on the country's biggest mortgage lender Halifax and some injudicious corporate and property lending by Bank of Scotland always spelled disaster.
Technically, of course, it did not go into administration. But that didn't stop it being docked 10 points before the end of the season. Something Lloyds failed to spot. Relegated.
Conflict of interest in the Bramdean spat
The spat between Nicola “Superwoman” Horlick and Vincent Tchenguiz over the £70 million Bramdean Alternatives fund, which she manages and in which he holds the biggest stake, is highly entertaining.
The gloves are off. Everyone is briefing against each other, and no doubt it will all end in tears. Most likely Nicola's.
I couldn't give a damn. She's annoyed me ever since that time 12 years ago when she leaped on a plane to Frankfurt — followed by fawning journalists — to confront the German bosses at Deutsche Bank who had suspended her.
For my money Carol Galley, Katherine Garrett-Cox and Nicola Ralston are, or were, all better fund managers who felt no need to highlight their gender or child-rearing capabilities. In the meantime, Horlick needs to address a problem on her own doorstep, not in Germany.
Peter Barton is chairman of Bramdean Asset Management. That is the fund-management company which Horlick largely owns and runs.
But he is also a director of Bramdean Alternatives, the fully listed investment which Horlick manages. She doesn't own any of Alternatives and does not sit on its board, but earns a hefty fee for management.
Barton has had a clear conflict of interests. He cannot be loyal both to Nicola and to Alternatives' various different shareholders. He is an honourable man with a noble City heritage and should resign forthwith.
Listing that's on the side of the angels
From the unedifying spectacle of Bramdean displaying its dirty linen across Park Lane to the rather more refined Angel Court tucked behind the Bank of England in the City.
Here we find Hanson Westhouse. A 30-strong small investment boutique dealing with AIM-listed companies. Backed originally by Hanson family and employee money, it's on its way to the stock market.
It has assembled an impressive board including Andrew Beeson, founder of brokers Beeson Gregory, and former top civil servant Sir Hayden Philips. Equally impressive is the advisory board, which includes Christopher Holdsworth Hunt, co-founder of Peel Hunt, Peter Meinertzhagen of Hoare Govett and Robert Hanson, Lord Hanson's eldest son.
These great and good will receive an annual fee of just £5000 and probably a decent lunch or dinner a couple of times a year. That's hardly fat-cattery.
It's also certain that most of them have taken a punt on the business doing well by buying shares in themselves. AIM isn't much in fashion at the moment but this could be an early buy signal.
