Flemings: The search for a strategy
UK merchant bank Robert Fleming is in dire need of a good performance in 1996. It's unlikely to get one. With thousands of new employees hired in a bid to extend the global network, revenues have not grown fast enough to cover costs. Shareholders are restless. Charles Olivier reports
Privately owned UK bank Robert Fleming has had an awful year. In January, there were allegations of insider dealing. In June Bill Harrison, its head of investment banking, resigned. In August, there was an asset-management scandal at Jardine Fleming that led to the resignation of the Hong Kong-based investment bank's chairman, Alan Smith. No wonder John Manser, Flemings' previously unruffled chief executive, is beginning to look rather frazzled. Last month, shortly after announcing a management shake-up in the wake of the Hong Kong irregularities, he warned that the 120-year old bank might be forced to move out of London to avoid overzealous regulators.
The fireworks may not be over yet. Manser has called an emergency meeting of senior Flemings executives scheduled for later this month to discuss the progress of the globalization plan he launched in 1990. Over the past six years, Flemings has hired thousands of new employees in a bold bid to transform itself from an asset-management firm with a strong banking presence in Hong Kong into a global investment bank or, as Flemings puts it, a global investment bank except in the US.
Revenues have failed to keep pace with the escalating costs involved.