Outlook: Halifax

MIKE BLACKBURN was said to have been bounced out of his job as chief executive of the Halifax for failing to provide a good enough answer to the question of what Britain's biggest building society turned bank was for. Now his successor, Jim Crosby, has adopted the posture of one ordering a rearrangement of deckchairs on the decks of the Titanic.

Halifax's sense of timing could hardly have been better. Halifax chose the very day its own number crunchers said the housing market is going like a train to announce a big rationalisation of its estate agents chain, including the sale of 222 branches.

The story is a painfully familiar one, for Halifax isn't the only big financial institution to have squandered its money by buying into estate agencies at the top of the housing market, paying the price through the trough, and then compounding its error by getting out just when the market is beginning to turn once more. Prudential did the same thing.

When Jim Crosby was hurriedly appointed last year, many in the City expressed doubts but most said he should be given time to prove himself. As time wears on the question about whether he really has the ability to raise his head above operational matters grows more pressing.

The mortgage market is in long- term decline, margins are being eroded, and the Halifax is struggling to maintain market share. Six months ago the bank was considered as a merger candidate for Barclays. Not now.

Halifax is one of the best brands in retail financial services and the organisation is generally considered in the City to be well run. In terms of market capitalisation it is still bigger than Deutsche Bank. It is also sitting on pounds 1.5bn of surplus cash. Yesterday's rationalisation of the estate agents may be reasonable enough housekeeping, but it will do nothing to reverse the sense that all the Halifax can do is genteelly manage its own decline.