A&L targets small business market

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The Independent Online

The high street bank Alliance & Leicester said yesterday it is looking to boost its 2-3 per cent share of the small business market following a sweeping management reorganisation.

The high street bank Alliance & Leicester said yesterday it is looking to boost its 2-3 per cent share of the small business market following a sweeping management reorganisation.

The new structure, which replaces the traditional product-based organisation with a "customer-facing" operation, is seen as an attempt by the new managing director, Peter McNamara, to put his stamp on the bank and shore up City confidence after a 37 per cent fall in A&L's share price this year. The grouphas been seen in the City as rudderless since the sudden departure of Peter White as chief executive last year.

However, the changes - which were announced just two days before what are widely expected to be a disappointing set of half-year results - did little to inspire the City. A&L shares fell 16.5p to 491p yesterday.

Analysts complained about the lack of hard numbers to back up the rhetoric. Mr McNamara promised to release targets for cost reduction and revenue growth in October.

Mr McNamara said the structure would deliver a "better focus on what customers are after and lower cost". He said he saw big opportunities for making more of the group's existing 5.5 million customer base and using the huge experience it had of the corporate sector through Girobank to boost its share of the small and medium-sized business market. Girobank currently handles a quarter of the cash takings deposited by businesses.

He also saw unexplored opportunities for cutting costs. He said: "We have 33 call centres. I don't know whether we need all of these."

As part of the reorganisation Lynne Taylor, head of financial planning, will be put in charge of small business banking, while Graham Pilkington, who is to follow Mr McNamara across from Lloyds TSB, will take on a new post of director of personal customer services.

Mr Pilkington, whose current job involves identifying different customer types within Lloyds' customer base, will lead A&L's efforts to sell more of its products to existing customers. Cross-selling is an area in which Mr McNamara admits A&L has been weak in the past.

The bank is also giving Tim Pile,director of sales and marketing for A&L's retail operation, group-wide responsibility for developing the Alliance & Leicester brand. The bank is creating separate functions to oversee manufacturing and distribution.

John Windeler, executive chairman, insisted that the moves announced yesterday should not be seen as a response to widespread City speculation that the bank was vulnerable to takeover.

He said: "We see ourselves with a very strong independent future. We see the best way to create shareholder value is to create it organically."

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