View from City Road: Judge sets Pitman a Herculean task

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The Independent Online
Brian Pitman's celebrity status in the banking world is based on his successful concentration on shareholder value as the benchmark for managing a bank. Lloyds' performance relative to the other clearers is his monument.

But to his staff and immediate competitors his other quality is singlemindedness; his reputation is as a streetfighter, a gloves-off manager who makes a dangerous enemy for his colleagues and a tough opponent for his competitors. 'Never fight battles you cannot win', is one of his favourite catch-phrases.

For much of his time leading Lloyds Bank, he could leave the cerebral bit to his former chairman, Sir Jeremy Morse. The two sometimes fell out - notably over the failed bid for Standard Chartered in 1986 and then later over the handling of the bid for Midland (which was never formally made in the end). It was Pitman's pushing that kept these ill-fated campaigns on the road.

The same was true of the one successful bid, for Abbey Life, which also became touch and go after Abbey shareholders rebelled. In the end, however, Mr Pitman's alliance with Michael Hepher, who ran Abbey, pushed the deal through. There are perhaps parallels to be drawn between that situation and the difficulties Mr Pitman now faces in securing his takeover of the Cheltenham & Gloucester Building Society. In the new bid, he is said to have struck up a similar rapport with Andrew Longhurst, chief executive of C&G.

That certainly differentiates this bid from the two failures, where the boards did not want anything to do with Mr Pitman and his ambitions to rationalise the industry. Given his alliance with Mr Longhurst, Mr Pitman is not going to be easily deterred. We can believe Lloyds and C&G when they say that come what may they are going to push ahead.

The more important question is whether this is Dunkirk or D-Day. Within 24 hours of the High Court judgment which seemed to so damage Lloyds' chances, lawyers were finding fresh new hurdles to overcome, notably the judge's apparent ban on payments to borrowers who are not also depositors. Many mortgage borrowers, who have a separate vote from other account holders, will gain nothing from a deal.

This could prove insuperable whatever clever wheezes the financial engineers in the City come up with to restructure the deal. Lloyds' best chance may be a waiting game - until either the law is changed or enough depositors have crossed the two-year barrier to allow the deal through. Time is not on Mr Pitman's side, however. He is due to retire at the end of 1996.