Lloyds finds property buyers


Financial Correspondent

Lloyds Bank is selling repossessed properties in the City at above market value, according to Sir Brian Pitman, its chief executive. It could not sell them at any reasonable price two years ago, he said.

Sir Brian refused to comment on Canary Wharf, which is the subject of a bid from a consortium including its original developer, Paul Reichmann, and Saudi prince al-Waleed bin Talal. Lloyds leads the group of 11 banks which owns the development in London's Docklands and is currently in negotiations over the offer.

In a wide-ranging interview, Sir Brian told the Independent that London was profiting from a massive influx of investment from the Continent, particularly German and Swiss investment banks. He said this was obviously also having an impact on Canary Wharf.

"There is obviously a great interest in the City with Deutsche Bank moving to London, Dresdner moving to London, and other US investment banks moving to London. The most powerful economy in Europe is choosing London as the financial centre of Europe. That is very important," he said.

However, London's transport infrastructure remained "a major problem". Sir Brian said: "Every major city that I know has got difficulties with transportation."

He said that Lloyds had itself relocated more than 2,000 staff to Bristol, to attract good-quality staff by offering a good quality of life.

Sir Brian also said Britain was suffering from a particularly painful transition from being a high-inflation economy to a low-inflation one. The "Holy Grail" of stable prices was worth fighting for.

Sir Brian kicked off a public debate a week ago when he said inflation was rising out of control and indicated that interest rates should rise. This was an obvious gesture of support for the Governor of the Bank of England, Eddie George, in his confrontation with the Chancellor, Kenneth Clarke, over the direction of interest rates.

Sir Brian is a hawk on inflation and warns against any moves to revive the stagnant housing market, such as tax breaks or interest rate cuts, since this would re-ignite general inflation. He also claims that a low- inflation economy will give British banks a fundamentally lower level of bad debts. Instead of the boom-to-bust cycles seen in recent years, with total UK bank bad debts topping pounds 6bn in 1992, a stable low-inflation environment would see minuscule bad debt in comparison.

Asked why he was so hostile to moves to help the housing market when Lloyds had recently bought Cheltenham & Gloucester Building Society, a large mortgage lender, he replied that a short-term boost to housing would in the long term be damaging to C&G since any resulting boom would lead to another bust. He said that if another building society became available at the right price and adding shareholder value, Lloyds would look at it. He warned that the merger between Halifax and Leeds, which will convert to bank status, will create a very tough competitor in the market.

"It will keep us on our toes. Halifax alone was bad enough, and it will be quite a force in the financial services market."

He also warned that job cuts at Lloyds and throughout the banking sector would continue. Sir Brian has long held the view that financial services in Britain are going through the same fundamental shake-out as UK manufacturing suffered in the early 1980s.

That means that 2,000 jobs have gone from Lloyds in the past 12 months, and cuts are likely to continue at that rate in the future, he said.

Arts and Entertainment
On set of the Secret Cinema's Back to the Future event
filmBut why were Back to the Future screenings cancelled?
Susan Sarandon described David Bowie as
peopleSusan Sarandon reveals more on her David Bowie romance
Lewis Hamilton walks back to the pit lane with his Mercedes burning in the background
Formula 1
Arts and Entertainment
The new characters were announced yesterday at San Diego Comic Con
comic-con 2014
Arsenal supporters gather for a recent ‘fan party’ in New Jersey
ebookA unique anthology of reporting and analysis of a crucial period of history
Arts and Entertainment
No Devotion's Geoff Rickly and Stuart Richardson
musicReview: No Devotion, O2 Academy Islington, London
newsComedy club forced to apologise as maggots eating a dead pigeon fall out of air-conditioning
Life and Style
Balmain's autumn/winter 2014 campaign, shot by Mario Sorrenti and featuring Binx Walton, Cara Delevingne, Jourdan Dunn, Ysaunny Brito, Issa Lish and Kayla Scott
fashionHow Olivier Rousteing is revitalising the house of Balmain
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior Risk Manager - Banking - London - £650

£600 - £650 per day: Orgtel: Conduct Risk Liaison Manager - Banking - London -...

The benefits of being in Recruitment at SThree...

£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...

Test Analyst - UAT - Credit Risk

£280 - £300 per day + competitive: Orgtel: Test Analyst, Edinburgh, Credit Ris...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments
Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

Jokes on Hollywood

With comedy film audiences shrinking, it’s time to move on
Edinburgh Fringe 2014: The comedy highlights, from Bridget Christie to Jack Dee

Edinburgh Fringe 2014

The comedy highlights, from Bridget Christie to Jack Dee
Evan Davis: The BBC’s wolf in sheep’s clothing to take over at Newsnight

The BBC’s wolf in sheep’s clothing

What will Evan Davis be like on Newsnight?
Finding the names for America’s shame: What happens to the immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert?

Finding the names for America’s shame

The immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert
Inside a church for Born Again Christians: Speaking to God in a Manchester multiplex

Inside a church for Born Again Christians

As Britain's Anglican church struggles to establish its modern identity, one branch of Christianity is booming
Rihanna, Kim Kardashian and me: How Olivier Rousteing is revitalising the house of Balmain

Olivier Rousteing is revitalising the house of Balmain

Parisian couturier Pierre Balmain made his name dressing the mid-century jet set. Today, Olivier Rousteing – heir to the house Pierre built – is celebrating their 21st-century equivalents. The result? Nothing short of Balmania
Cancer, cardiac arrest, HIV and homelessness - and he's only 39

Incredible survival story of David Tovey

Tovey went from cooking for the Queen to rifling through bins for his supper. His is a startling story of endurance against the odds – and of a social safety net failing at every turn
Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride