“Yes, I am angry,” I admitted reluctantly. The cause of my curmudgeonly mood is a 600-square foot flat in Notting Hill Gate and my current status as a landlady in quest of a tenant. And when I say tenant, I mean the right sort of tenant. You know the type: an industrious investment banker who works 14-hour days and is never at home.
My flat is the exception to the rule that estate agents always lie. It is in impeccable condition: the interior colour scheme is a medley of beiges and so light that you feel you have entered paradise. The previous tenant vacated a week ago and I have spent the past few days buying pillows, mattress covers and lavatory brushes! Being a landlady is a loathsome occupation. But selling a central London property today is foolhardy. Prices spiral higher every day. So I can’t afford to sell my investment and am condemned to be a landlady. Even so, I am haunted by a friend’s recent remark: “Abigail,” he warned, “you only know a bubble when it bursts.”
RBS
The Royal Bank of Scotland is also exposed to the British property market. Since the takeover of NatWest in 2000, RBS has become a powerful financial institution. It is ranked the 10th largest bank globally by market capitalization. Acquisitions like Citizens and Charter One in the US, the 10% consortium stake in Bank of China and the recent tie up with Renaissance Capital in Russia look imperialistic and impressive, but are they coherent? A source referred me to a phrase on a recent RBS presentation: Strength, diversity, and flexibility. But does this mean anything more than: “We are keeping all our options open”? Might this be why investors are wary? The RBS share price rose rather than rocketed during 2006. Sometimes, you need to come off the fence, even if you are an elephant.
RBS’s global banking and markets’ business has developed a strong presence in lending and securitisation and is starting to clamber up the bond and FX league tables. “Will they ever commit to investment banking?” a rival asked. “RBS is so big that this revenue stream is not significant for them.”
I think rival is wrong. If you look at the results for the first half of 2006, the corporate markets division produced 35% of the group’s income. And RBS is certainly ambitious in its hiring for this area. Over 2,000 people were recruited for the global banking and markets’ business during the last two years, and another 1,250 hires are envisaged this year.
There are familiar faces among the recruits. Men such as Chris Fleming, Roland Hinterkoerner, Rob Joliffe, Eden Riche and Brian Stevenson are highly experienced. Some cynics mutter the words: “Retirement trade.” I disagree. I doubt that the ebullient and charming Johnny Cameron, chief executive of corporate markets, would tolerate passengers.
But I do have other concerns. A multi-brand policy is acceptable for consumer goods’ companies. But is this effective in financial services? A mole grumbles about a group of RBS bankers meeting a client and presenting him with differently branded cards. In the United Kingdom, for example, RBS, NatWest, Coutts and Ulster Bank all operate within the RBS family. An insider insists that diversity is good: “Fred wants the customer to have a choice.”
However there is very little diversity when it comes to the RBS board. I spotted one lone female and 17 beefy males. Isn’t this a little mean-spirited? I temper my criticism because the Barclays board is equally testosterone-fuelled. My congratulations to HSBC however, which has 3 women on the main board. What progress we are making in the battle of the sexes! The image of a snail comes to mind.
Ouch!
Bonus season is upon us. And talking of the battle of the sexes, you have to pity one investment banker who purchased a new black Bentley as soon as he was paid. Unfortunately, the recent divorce had left his ex-wife somewhat bad-tempered. In the dead of night, she vented her wrath on his second most prized possession. Next morning, the banker was greeted by one word emblazoned in yellow paint on the Bentley’s bonnet: A***hole. I suppose it could have been worse. She could have done a Bobbitt.
For those who missed the news in 1993, Lorena Bobbitt cut off her husband's penis with a kitchen knife while he was asleep. She then drove off with the severed appendage and flung it out the car window.
Next week: Six words you never want your boss to utter and who wants to be a poor millionaire? Please send news and views to abigail@euromoney.com
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