Roger Davis: 'We're going to build the UK's best bank'

The new chief executive tells Jason Nissé how root-and-branch reform will turn the company advertised by stars into a star in its own right

On his first day at Barclays after joining as head of marketing last month, the former ITV chief Jim Hytner had a meeting with Roger Davis, Barclays' chief executive of UK banking. Used to the equivocating world of the media, Hytner was taken aback by Davis's directness. "We're going to build the UK's best bank," he said. "So it's pretty simple: you're going to have to make a difference."

On his first day at Barclays after joining as head of marketing last month, the former ITV chief Jim Hytner had a meeting with Roger Davis, Barclays' chief executive of UK banking. Used to the equivocating world of the media, Hytner was taken aback by Davis's directness. "We're going to build the UK's best bank," he said. "So it's pretty simple: you're going to have to make a difference."

As a former tank commander in the British Army, it is not surprising that Davis is known for getting to the point. He is also known for a certain bluntness and good humour, and has been heard to refer to quite influential people as "plonkers".

The Welshman, who jokes he only went into the City because he had "a degree and a suit", is also willing to try anything, including elephant polo, which he played with a few ex-Army chums in Nepal a couple of years ago. "It was great fun and I came away with some trophies and a very attractive tie," he recalls.

This attitude fits in with the new Barclays created by Matt Barrett, who has just stepped up from chief executive to chairman after five years at the helm of the bank. And Davis has benefited from the willingness of the Canadian to throw people into areas about which they knew little, in the hope of shaking the organisation up.

In the eight years since he joined Barclays from merchant bankers Robert Fleming, the 47-year-old has moved from running the Hong Kong arm of investment business Barclays Capital to become head of business banking and now head of the UK bank and a main board director.

"When I was put in charge of business banking, I'd never worked in a clearing bank before," he confesses. "When I was put in charge of retail banking, it was a similar situation. But there is tremendous experience in this business. There are over 40,000 people working here. Any shortfall in my detailed knowledge is more than made up."

Davis is now in charge of what one investor calls the "least sexy but most visible" part of Barclays. While the City salivates over the profits being delivered by Barclays Capital, or the growth prospects of Barclaycard, or the recently purchased Spanish bank, or the giant fund manager Barclays Global Investors, or any number of new and exciting initiatives, it is the UK retail bank that is the backbone of the group. It delivers the solid profits that have pulled Barclays back from being a basket case to being one of the UK's best-rated banks. It is the business than touches millions of people's lives every day. And its advertising and marketing is so prevalent that Matt Barrett once joked that people thought Samuel L Jackson was the chairman of Barclays.

Davis was put in charge with the remit of making the business and retail banks work better together. Last month, at an investor day, he revealed that he planned to improve the bank's cost/income ratio by 2 per cent over the next three years through cost cuts of around £350m. What many did not realise is that he intends to reinvest those savings by retraining staff, bringing more specialist financial advisers into branches and giving more resources to local bank managers.

That is unless the economy starts turning down. "If we are going to see a major slowdown, no one will be that positive," he argues. "If we run into stormy waters, we will do more on the cost side than in the reinvestment for long-term growth. Then that £350m will drop straight through to the bottom line."

Davis has been busy getting "more empowerment and expertise into the branches", which he explains in layman's terms as "back to the future - making branches more like they were 20 years ago".

This is important because of the advent of depolarisation - a regulatory reform which should give buyers of pensions, unit trusts and the like more choice and advice. Barclays has benefited in recent years from an exclusive deal to sell products from insurer Legal & General. But now it is likely to break the tie with L&G and will have financial advisers in its branches offering customers products from a panel of different providers. Davis sees this as a crucial growth area for banks, and he wants to be able to sell simple, easy-to-understand products in which customers can have confidence when they buy from Barclays.

And then there is business banking, where Barclays is the second-largest player in the UK behind Royal Bank of Scotland. This is the operation Davis has been running for three years, yet a week ago he received a slap in the face when a survey of 5,000 business customers, conducted by Nottingham University, placed Barclays bottom of all the high-street banks for performance. "The team was very disappointed to see the results," he says. "I have been concerned about the level we have been providing in that market and we are putting a number of things in place to address that."

These include dedicated business tills in branches, special teller machines for depositing cash and cheques, and a way of stopping calls to bank managers being routed to voicemail messages. This market is getting tougher, with HBOS targeting small business customers and Lloyds TSB making a concerted push, too. But Davis remains sanguine: "We're never frightened of competition. We've been around in this market for a long time."

It's just as well competition doesn't scare him, for Barclays has just got a new rival in the shape of Banco Santander Central Hispano. The Spanish bank, which completes the purchase of Abbey National this weekend, is well known to Barclays as they compete head-to-head in Spain. Davis thinks Santander will take some time to make a real impact. "I'm not sure how easy they will find it," he says. "They should get a warm Halifax welcome at every street corner."

This Wednesday, Davis will contribute to a "CEO panel" at the Marketing Society Summit, held at the Royal Opera House in Covent Garden. He will explain that under Jim Hytner and his predecessor, Simon Gulliford, Barclays has gone all-out to market itself as strongly as any bank in the UK. Hytner is now expected to move Barclays' marketing forward from the brand-building celebrity advertising in which not only Samuel L Jackson but Donald Sutherland and Sir Anthony Hopkins have been used as the faces of Barclays. Davis laughs that Hytner is relatively upbeat about life, despite the poor form of his beloved Manchester United. Maybe he should take up elephant polo.

BIOGRAPHY

Born: 4 June 1956.

Education: Worcester College, Oxford - degree in politics, philosophy and economics.

Career (1973-85): The Army - served in the Royal Tank Regiment and in Northern Ireland, along with a spell at the Ministry of Defence.

1986-96: Robert Fleming, merchant bank. On the board of Jardine Fleming Holdings and managing director of Jardine Fleming India. Latterly head of corporate finance in London.

1996-2000: Barclays Capital, chairman of Hong Kong business.

2001-03: Barclays, head of business banking.

2004: Chief executive of UK banking.