City & Business: Bankers aren't bonkers

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The Independent Online
Another week, another banking merger rumour. A lot of people in the City have bet big on the prospect of HSBC gobbling another bank, of NatWest having to make a defensive merger, and of a myriad of combinations involving newly demutualised insurers and building societies and just about any foreign bank that now considers raising money in the equity markets. They are beginning to wonder why these institutions insist on not doing the decent thing.

Last week's episode featured Commerzbank, a German outfit that was probably minding its own business before it suddenly became NatWest's latest suitor. I believe that makes 34 potential candidates mentioned in the same breath as NatWest in the last two years, the next breath usually being taken up with a critique of chief executive Derek Wanless. This column has always been a supporter of Mr Wanless: at a time of bonkers share ratings and unremitting City pressure, sensible management is crucial to the health of a bank. Need one mention the words "Third World" and "debt"?

The same could be said of the Prudential. After the news of Jim Sutcliffe's departure from the board, the worry is that while the Pru will have to make some wise decisions in the near future about how it plays the merger game, it is becoming a little depleted at senior management level and still has the small matter of pension mis-selling to sort out. Let's hope the Prime Minister does not make too many demands on Sir Peter Davis over the next few months.