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View from City Road: Clients to fore at Kleinwort

One can understand why Kleinwort Benson's outgoing chief executive Jonathan Agnew would want the bank's better-than- expected results to be announced before he leaves today. He would otherwise be faced with congratulating his successor, Norman Lamont-style, on the rapid effectiveness of the new man's policies.

But that still leaves Kleinwort without a new chief executive. Lord Rockley protests that these things take time. Andrew Buxton of Barclays would no doubt agree. Perhaps Kleinwort wants to demonstrate to the world that it is on the mend before hiring a new boss.

Behind the management's protestations of 'no change in strategy' another more encouraging message is emanating from Fenchurch Street loud and clear: Lord Rockley and his influential deputy chairman, Simon Robertson, want to regain the bank's 'pole position' it enjoyed just five years ago by embarking on an aggressive campaign to win back clients.

Yesterday's good news could be too little, too late. The trading disasters and in-house feuding of the last few years may be behind it, but Kleinwort is now a long way adrift of the main UK contenders such as Warburg and Schroder.

The last two houses, for instance, have enjoyed rocketing profits from their steadily expanding fund management operations, yet Kleinwort's own investment management side has stagnated for the last few years.

The question is whether these first-half results reflect anything other than a better trading environment for merchant banks generally - see BZW's results - rather than a fundamental recovery in Kleinwort.

Certainly, increased corporate activity and higher stock market volumes give Kleinwort the most valuable gift of time. Messrs Rockley and Robertson can launch a lunch offensive on British boardrooms secure in the knowledge that the City is prepared to give them the benefit of the doubt for the moment.

After Kleinwort's long civil war between corporate financiers and the securities side, the new chief executive needs to be a charismatic figure who will get employees worrying about clients' needs rather than access to the executive washroom.