Outlook: Sir Brian rolls out the Three Cs
Saturday 01 August 1998
WHEN CLEARING bank chairmen start complaining there is too much capacity in the market, what they really mean is that there is too much competition. Their answer to the above problem is consolidation. Yesterday it was the turn of the bankers' banker, Sir Brian Pitman of Lloyds TSB, to roll out the Three Cs.
Yesterday's results from the bank were weighed down by heavier than expected pension mis-selling provisions and the share price over-reacted accordingly. But what ought to be exercising the markets is how Lloyds along with the rest of the sector is going to adjust to a downturn in the economic cycle and an upturn in the degree of regulation over the next couple of years.
That is where consolidation comes in. Lloyds is still generating capital faster than it can find uses for the stuff and probably has pounds 1bn-pounds 2bn to throw around on a stray mortgage provider or insurer.
But Sir Brian seems to envisage the kind of banking consolidation we have seen in the US and Europe in coming months, which involves capital outlays of a rather larger order or mergers of equals.
Virtually none of the banks deserve the fancy ratings they currently enjoy, and we are likely to see a re-rating of all the financials in the coming months. But Lloyds deserves to be toward the top of the banking pile, not the bottom. It has lower costs than most of its rivals, it takes a tough stance on credit quality, it has some great brands - Cheltenham & Gloucester, for example - and it will continue to realise cost savings from the integration of the Lloyds and the TSB networks.
Having the cash or paper to do the deals is one thing. Getting regulatory clearance is quite another.
- 1 Scottish referendum: So how about the English now being given a chance to split from England?
- 2 Stamford Hill council removes 'unacceptable' posters telling women which side of the road to walk down
- 3 Kim Kardashian 'naked pictures' leaked on 4chan weeks after Jennifer Lawrence 'The Fappening' scandal
- 4 Matthew Miller: American sentenced to hard labour in North Korea 'wanted to be Snowden II'
- 5 Iranian blogger found guilty of insulting Prophet Mohammad on Facebook sentenced to death
Stamford Hill council removes 'unacceptable' posters telling women which side of the road to walk down
Kim Kardashian 'naked pictures' leaked on 4chan weeks after Jennifer Lawrence 'The Fappening' scandal
Isis in Syria: 60,000 Kurds flee terror in new exodus
Iranian blogger found guilty of insulting Prophet Mohammad on Facebook sentenced to death
4Chan naked photos leak: Celebrity Twitter reactions to the mass breach of privacy
Scottish independence referendum: A nation divided against itself
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Archbishop of Canterbury admits doubts about existence of God
Portuguese academic says British are 'filthy, violent and drunk'
iJobs Money & Business
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...