Stark choices on the road to conversion; THE MONDAY INTERVIEW; John Stewart

Woolwich's new boss tells Nic Cicutti why the society is not going to be sold 'on the cheap'
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There are times when all of us are faced with the starkest of choices. If you are, say, a scrum-half, it might be the moment when a high ball unexpectedly drops into your hands and you look up to see the 19-stone frame of Jonah Lomu suddenly thundering towards you. Rugby aficionados call it the "hospital pass".

For John Stewart, newly appointed chief executive at Woolwich Building Society, the same point will come should he face Peter Davis, his opposite number at Prudential, bearing down hard on him. Can he dummy smartly round Mr Davis to score a quick pounds 3bn flotation some time next year?

The stakes are high. Prudential has openly stated its ambition to become one of the UK's top financial services players, with a branch-based mortgages and savings operation as a key part of its operation. Speculation of an imminent bid for Woolwich has been rife for months.

Meanwhile, the society, which announced its flotation plans at the beginning of the year, in the process raking its studs over the concept of mutuality, tripped up in April when it dumped its former captain barely three months into the conversion countdown.

Mr Stewart, the society's former operations director, was drafted into the top post after an exhaustive three-month examination of candidates, with himself as the only insider to apply. Unfriendly observers claim outsiders dropped out because none of them fancied the job of running Prudential's mortgage arm in a year's time.

True or not, Mr Stewart is unfazed. "My position and that of the board is that we believe we can make Woolwich into a plc. We have no problem competing with other financial services institutions. On the other hand, if someone comes along and makes an offer, and everything is right about it, then there's probably no good reason why I would turn that down.

"We would certainly look at that very seriously, but what we are not going to do, because we have lost our chief executive in an accident, is sell the business on the cheap."

The "accident" he refers to is the sudden departure of his former boss, Peter Robinson, accused in April of financial irregularities, including the use of society gardeners to work on the grounds of his home in Kent.

The charges, always strenuously denied, were resolved the day after Mr Stewart's appointment, with Mr Robinson, aged 54, being allowed to retire early. Mr Stewart admits that the manner of his predecessor's departure was an own-goal for Woolwich: "The society's reputation, which has really been one of the best, has gotten tarnished for a while."

At the same time, he does not accept that appointing Mr Robinson as chief executive was a mistake in itself : "He has tremendous acumen, he really understood the business. He could set interest rates in his head, and that kind of stuff."

Mr Stewart acknowledges that in the 11 years they worked together at the society's Bexleyheath headquarters, Mr Robinson was always one of his strongest backers.

In fact, it was an accident that first brought him down to London from Scotland in 1985, where Mr Stewart, who had joined the Woolwich seven years earlier, was managing the society's Sauchiehall Street branch in Glasgow.

"Before the Woolwich, I worked in insurance and had the industry's professional qualification, the ACII," he remembers. "Years later, the Woolwich was looking for someone who knew something about life insurance.

"They didn't have a clue why, but they advertised externally - this seems to have happened to me again recently," Mr Stewart quips. "So I got the job and that ended up with our existing life assurance arm and our unit trust arm. It was coming down to a job that didn't exist and saying, 'We can do this'." A rapid rise through the society's ranks followed, with Mr Stewart, now 47, being in at the ground floor of virtually every important initiative Woolwich has been involved in since.

He is disarming about his success: "I'm a good coach. Seriously, I get good people around me, I tell them precisely what I want and give them the authority to do it. They do a good job and I get promoted. It's as simple as that."

Despite such self-styled opportunism, it is fair to claim that Mr Stewart is well liked by his staff: "He gives the impression of being quite a nice person, not a total bastard, like he's interested in you as a person and is not just out to screw you," is one typical comment. Mr Stewart himself, however, actively tries to dispel the softie image: "I'm the guy who over the past decade or more has virtually started a company a year. How many people can do that in a normal working environment?" he asks rhetorically, before adding: "There's a lot of financial discipline here. You can't just come in with a good idea. You have to come up with a business plan, which is closely monitored. Even after that, you are only as good as your last project."

And Woolwich's projects have, in the main, been successful of late. It returned profits of pounds 333m in 1995. When the society releases first-half results for 1996, they will be streets ahead of the same period last year, Mr Stewart says.

This time, all the society's operations, including its life and unit trust arm, the Italian and French subsidiaries and - God forbid - perhaps even Woolwich's estate agency chain, will be turning in a profit.

It is this success that prompts Mr Stewart to observe of potential bidders: "If anyone were to talk to us, what they would see is just how good these companies are and therefore how expensive we would be."

As if to show he too can play a flanking game, Mr Stewart suggests that Woolwich, too, can announce an agreed takeover of a building society and a mutual life insurer in the coming months. Mr Stewart believes the deals will come through a combination of mutual societies and insurers admitting they need economies of scale as "product factories" and recognising that Woolwich is the partner, with the right size distribution network, to team up with.