My week: Banking already has a new look, but the biggest changes are yet to come

And goodwill breaks out between buyers and sellers in the City

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The Independent Online

I spent Monday in the company of the two sides of British banking. First of all, coffee with Antony Jenkins, the chief executive of Barclays, who is trying to bring about culture change, a hefty restructuring and a technology revolution all at the same time. His recent reset of the plan, which will result in investment banking activities being reduced to no more than 30 per cent of the business and up to 19,000 staff being laid off, shows this is a movable feast. Yet he is confident he is getting somewhere.

For all the growth Mr Jenkins might see in the top line from a recovery in foreign exchange and commodities trading, it is tackling cost that will bring the improvement in the dividend that shareholders are pressing for.

Cost is also on the mind of Wilbur Ross, nicknamed the King of Bankruptcy after scooping up numerous failed companies and turning a handsome profit on them. Mr Ross might be best known for the American steel mills and coal mines he has traded over the years, but his interest turned to financial services as soon as the crisis broke.

Now he is behind Sir Richard Branson’s tilt at shaking up high street banking as a leading shareholder in Virgin Money. It’s been a long time coming. The pair originally tried to buy Northern Rock together in 2007 but Gordon Brown’s government opted to nationalise it.

Mr Ross didn’t mind the wait. He hung around for four years before deciding it was the right time to invest in a Greek bank a few months ago.

Virgin Money has critical mass now, with 500,000 credit-card customers and 1.25 million savings accounts. With the launch of a current account imminent, Mr Ross is casting an eye over the rest of the market. It’s one thing to herald the glut of new challenger banks – including TSB, whose shares got off to a strong start yesterday. But cost pressures dictate these tiddlers will eventually be consolidated by someone.

Mr Ross likes the idea of Virgin driving into small-business lending. The one thing he doesn’t want is more bricks and mortar. Can a full-service British bank really be run off just 75 branches? Ask FirstDirect, which doesn’t have any. Barclays, on the other hand, has more than 1,500.

We think that banking has been completely overhauled by tighter regulation of capital and new selling rules. But the cost of implementing all those rules, plus consumers’ enthusiasm for mobile and web banking, means that bigger changes still lie ahead.

After Crossrail, what will be next infrastructure project?

 From bankers to diggers. After exploring the heights of Barclays’ 30th floor at Canary Wharf, I plunged beneath ground for a tour of the Crossrail project, which is quietly taking shape beneath the capital.

More than 80 per cent of the 26 miles of new tunnels that will carry trains west to east through London from 2018 are already dug. Now they are into the business of spraying concrete linings on the tunnel walls. Station platforms and ticket halls come next.

Terry Morgan, Crossrail’s chairman, who donned high-vis jacket and trousers to show me around, is supremely confident of hitting deadline and budget.

Two points stuck out. The Government has just this week rolled out the red carpet to the Chinese premier, Li Keqiang, securing pledges to invest in new nuclear power stations; meanwhile the £16bn Crossrail project is being financed largely from increased London business rates.

Mr Morgan, a veteran of BAE Systems and Land Rover, has also been careful to plan for the future. A training academy for tunnelling and underground construction, sponsored by Crossrail, has ushered 5,000 people through its doors since it opened in Essex in 2011.

Now we need some bold vision for the next infrastructure project that can boost the economy and keep those workers busy. Perhaps sinking the HS2 rail link under the English countryside is just the thing to quieten the environmental lobby?

Goodwill breaks out between buyers and sellers in the City

 I could have sworn this year’s stampede on to the stock market would have slowed down by now. Yet this has been one of the briskest weeks so far for companies to announce their intentions to sell shares, price them or begin trading.

Fund managers have been doing their best to avoid over-hyped, over-valued new issues such as websites Just Eat and AO World. The listing of Saga, for all of its brand strength and customer loyalty, was just bungled. And some companies have decided just not to bother, such as the airline Wizz Air.

The appetite for fresh equity is still there, however. Zoopla, another digital darling, showed the way, pricing itself conservatively when it could so easily have been overdone. Even TSB, for whom Lloyds is a forced seller, looks like a success, aided by healthy interest from retail investors and Mark Carney.

By signalling that interest rate rises are on the way soon, the Bank of England’s Governor will inadvertently push more TSB customers on to fixed rate mortgages – a trend which makes for higher profit margins.

It seems goodwill has broken out between buyers and sellers in the Square Mile. Surely it’ll never last?