Banks hone new cutting edge at the top: In the first of a series on the leading lights in Britain's financial, commercial and industrial sectors, Lisa Vaughan looks at banking

CLEARING bankers used to join from school at 15, stay in the same bank and grind their way slowly up the promotion ladder. The handful that found themselves running the show, 40 years later, were ill-prepared after a lifetime of bureaucracy for the harsh world of financial competition in the 1970s and 1980s.

Worse still, they invariably found themselves working for a chairman plucked from outside, from the civil service or industry. This very British system of warrant officers from the ranks serving patrician chairmen from the officer class may help explain why the clearers have made so many mistakes in the past 20 years.

Some bankers at the top of Britain's biggest banks still fit the old stereotype. But after three damaging recessions since the banks were freed to compete for business more than 20 years ago, there are also big changes in the way banks select their top men.

Furthermore, many of the bankers who still work their way up from the ranks are now far better educated in business and management skills than their predecessors, and they arrive at the top younger.

The best example is Derek Wanless, the 44-year-old newly appointed National Westminster Bank chief executive, who has been on the fast track in the past six years. Though whizz-kids in bank management are mostly out of fashion in the gloom of recession, Mr Wanless, a Geordie, appears to be one of the industry's deserving fair-haired boys.

Another high-flyer at NatWest is Welshman Martin Owen, a Salvation Army officer. His career has been unconventional: he is a reputed millionaire and has set up and run his own business. A full NatWest board director, he has the task of merging County NatWest into the group's treasury and corporate finance business.

They were both chosen by Lord Alexander of Weedon, the 6ft 6in chairman of NatWest Bank, who was Britain's most successful commercial barrister and chairman of the Takeover Panel before moving to NatWest in 1990 with no banking experience. In the ambassadorial role he has adopted at NatWest, Lord Alexander has made frequent public policy speeches, which suggests he may hope for the Bank of England governorship next year.

A famed puzzle and chess expert, Sir Jeremy Morse steps down as chairman of Lloyds Bank after 15 years. Brian Pitman, Lloyds' chief executive for nearly 10 years, resembles the former Labour leader Neil Kinnock with a burly build. He nearly opted for cricket as a career and was once a professional saxophonist.

Heading for the ascendancy at Lloyds are the trilingual Paul Brown, director of private banking with wide international expertise, and New Zealander David Clarke, chief executive of Lloyds Merchant Bank.

If Lloyds' Brian Pitman looks like Neil Kinnock, then Brian Pearse, Midland's chief executive since 1991, faintly resembles the new Labour leader, John Smith. From Liverpool, Mr Pearse is a hands-on manager who has boosted sagging morale at grassroots level. His no-nonsense, cautious approach has put Midland's profitability back on track.

Up and coming at Midland are Christopher Wathen, managing director of branch banking, and Richard Delbridge, finance director, who is moving on to the board of new owner HSBC Holdings.

Among Mr Wathen's accolades are winning the highest marks in the national Chartered Institute of Bankers examinations in 1970, and landing on his feet after close involvement with Midland's disastrous acquisition and management of Crocker Bank of California, which lost the bank an estimated pounds 1bn in the 1980s.

Mr Delbridge was general manager in London of the blue- blooded US investment bank J P Morgan before joining Midland. His conservative appearance may belie a fascinating past: he received an MBA from the University of California at Berkeley in 1968, the epicentre of the hippie culture at its peak.

Replacing Sir John Quinton as chairman of Barclays Bank this year is the deadpan 54-year-old Andrew Buxton, managing director and deputy chairman, and a founding family member.

Mike Pitcher, deputy managing director of banking, John Cotton, personnel director, and Chris Lendrum, recently appointed a regional director on the planning side, are among those tipped for ascent at Barclays.

Former chairman of the Stock Exchange, Sir Nicholas Goodison, has chaired TSB Group since 1989. The tall, craggy Sir Nicholas looks like an undertaker but takes a lively interest in opera, art and antiques. He has restructured TSB continuously since his arrival but the loss-making Hill Samuel merchant bank continues to hold it back.

Peter Ellwood was rushed in last month as the new TSB chief executive, when his predecessor, Don McCrickard, left suddenly. The cheery and energetic former chief executive of Barclaycard joined TSB in 1989 and kept its retail banking and insurance businesses profitable in the recession.

Standard Chartered Bank's far-flung network is headed by Rodney Galpin, a career Bank of England man who was seen as the regulator's attempt to improve Standard's weak management in 1988. He had nearly wiped Standard's slate clean when it was caught by the Bombay Stock Exchange scandal this year.

Malcolm Williamson, managing director, is Standard's dynamic troubleshooter and has headed steering committees for debt- riddled companies like Polly Peck and Brent Walker. It is no coincidence that he practises scaling mountains in his free time.

Abbey National's on-the-ball chief executive, Peter Birch, is an innovator. He shook up the cosy building society ethos, led Abbey in its conversion to a bank, and kept it in profit during the worst housing market slump since the 1930s. Four rising stars - Charles Toner, Ian Harley, Gareth Jones and Bob Knighton - are being groomed for top positions in the next few years.

Former defence minister George Younger took over the governorship of Royal Bank of Scotland last year. Shareholders hope he will have more success than he did as Mrs Thatcher's campaign chairman during her 1990 leadership challenge.

His counterpart at rival Bank of Scotland, seen as one of Britain's best managed banks, is the highly respected Bruce Pattullo. A geographical outsider, he has also been tipped for the Bank of England governorship. An inveterate corporate tie-wearer.

Defending the banks' rank and file from the above-mentioned bosses is Leif Mills, general secretary of the Banking Insurance and Finance Union. Oxford educated, he sat on the Monopolies and Mergers Commission for nine years. A rower and connoisseur of beer, he eschews lager.

Keeping the banks in line at the Bank of England is Roger Barnes, head of banking supervision. He keeps a low profile but may find some unwelcome celebrity when the Bingham Report on BCCI, drafts of which contained strong criticism of the Bank, is published soon.

(Photographs omitted)