Having seen the UK suffer this fate, it is ironic that The Banker is now suggesting that one of the world’s major banks is, conversely, all substance and no spin. The fact is that in modern business as much as in politics, spin counts. A public company has to be able to communicate its strategy effectively to shareholders and patiently respond to the many criticisms and complaints from journalists, analysts and investors – respond, that is, by better explaining the strategy, not by changing the course of the bank. Royal Bank of Scotland (RBS) has transformed itself in five or six years from a middle-ranking player to one of the world’s leading and most successful banks. But, as Geraldine Lambe writes in this month’s thoroughly researched cover story, it has not conveyed that message to the market. As a result, its stock price is languishing. RBS has to work on its communications skills or resign itself to missing out on the credit it deserves.
On the theme of emotional rather than monetary credit, Luqman Arnold, former CEO of the UK’s Abbey, was roundly criticised for selling the bank to Santander of Spain. In an interview with Karina Robinson, he insists that selling a “15 million customer bank with low morale, five years of underinvesting in the core business and problems in the substantial life business” was an achievement. Many considered the bank unsellable.
In The Banker’s spirit of championing those who don’t get the credit they deserve, this issue also contains articles on Spain’s cajas – the state-owned savings banks that are now taking on the private sector banks; Rossisky Kredit Bank, the only major Russian bank to repay all its debts after the crisis; and Belarus, described as “the last dictatorship in central Europe” but actually on a gradual reform path.
Continuing the theme, economics editor James Eedes conducted interviews with Barbados premier Owen Arthur – who had the guts to go against IMF advice; with the prime minister of St Kitts and Nevis, Denzil Douglas, who is promoting the twin-island state as a financial hub following the collapse of the sugar industry; and with Algerian finance minister Mourad Medelci about a government spending plan to help rebuild a war-shattered economy.
Dan Barnes looks at solutions to the credit derivatives processing problem and at the implications of the Markets in Financial Instruments Directive for the buy-side. In capital markets, we look at insurance-linked securities and property derivatives as well as UBS’s subordinated debt deal for GECC. There are supplements on Basel II and European mortgages. Plus, we list the Top 100 Arab banks and discuss the booming Gulf economies.
We hope that, on reflection, you will be persuaded to reshuffle your credit portfolios.
