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Godfather bows out of Lloyds after 49 years

19 April 2001

By Jill Treanor

Winston Churchill was prime minister when Sir Brian Pitman started a lifetime's service with the same bank. Winston Churchill was prime minister, presiding over a nation in mourning for King George VI, Cary Grant was filling cinemas with his performance in High Noon, while Gene Kelly was Singing in the Rain.

The year was 1952 and the rationing of food introduced during the second world war was still in place as a young Gloucestershire lad, fresh from his local grammar school, started his first job. A keen trombonist and avid sportsman, the youthful Brian Pitman was joining Lloyds, the bank to which he devoted 49 years of uninterrupted service before retiring yesterday after 14 years as chief executive and four years as chairman.

Times have changed. 'When I joined the bank, everything was handwritten, the ledgers, everything. Now it's done at the press of the button,' he said yesterday as he presided over his last annual general meeting.

Refusing to admit to any sense of nostalgia, Sir Brian - knighted in 1994 -said yesterday: ' I'm feeling great. I'm looking forward not back. I've had a great time. It's been a ball.'

To a certain extent it is hard to disagree with the 69 year old, whose accent still holds traces of his Gloucestershire roots. Something of the godfather of the banking industry , Sir Brian has steered Lloyds through an historic journey, enjoying enormous successes interspersed with embarrassing failures.

Among the successes was getting out of investment banking before it became unfashionable and earning a reputation as a deal doer. It was Sir Brian who snapped up Cheltenham & Gloucester, the building society with its roots in his home region, before it was fashionable for building societies to give up their mutuality. He sealed the takeover of Trustee Saving Bank to create the current bank - Lloyds TSB.

More recently, as chairman, he presided over the takeover of another mutual -Scottish Widows - although to a rather less rapturous applause than previously. Among the failures were the deals he missed, notably the takeover of Standard Chartered in 1986 and Midland in 1992. This was a legacy that had almost been forgotten by a newer generation in the City before being reawakened by the bank's current plight - the attempted takeover of Abbey National, currently in limbo because of a competition investigation.

Even Sir Brian cannot escape the schadenfreude of some who have taken to pinning the blame for the bank's current predicament on his fight to cut costs during the 1990s - which earned the bank an almost iconoclastic status in the City -instead of investing for growth.

This is why some City sources believe Lloyds TSB was left searching for another takeover target - in this case Abbey.

With its ambitions to take over Abbey outside the bank's control, and a promised European tie-up still eluding the bank, Sir Brian repeats his mantra that mergers across the financial services industry are only a matter of time.

"Some business being put on [by our rivals] is not earning the cost of capital," he said. His one prediction for the future of banking is that customers will soon have to start paying for what they get.

People often ask why people don't move their bank accounts. It's because bank accounts are free. You can't get a price lower than free. This means that in the future there'll be steady elimination of cross subsidisation where you get so much free' he said.

Technology is the biggest single thing that has changed his half century at work.' It revolutionised the way we can do business. "It will go on being important. The challenge will be how to provide a personal service in a digital age - how do we get that individual services. Those who can do it, whether selling airline services or banking, will win," he said.

Lloyds experience with technology has been mixed. Its plan for an internet bank, Evolve, has only seen the light of day in Spain, although the branches which were at the core of the business when Sir Brian started out have now been complemented by cash machines and telephones.

His personal experience is also varied. He is not thought to be keen on email, yet is on the board of one of the brightest companies of the new economy age -Carphone Warehouse.

He is also non-executive chairman of the retailing doyenne Next, troubled engineer Tomkins and Carlton Communications. Vastly different businesses? Not so, he said. 'At Carphone Warehouse, the key is its service. What distinguishes Next is outstanding service.'

This is also, partly, where ailing retailer Marks & Spencer's problems lie. 'It's the product and service that make the brand. If ever the was an example of the brand, M&S was one. It applies to every business - it's the product and service that make the brand,' he said.

Just like banking, he said. That too is about customer service and even as he retires from Lloyds he is not severing all ties with banking and the City. He will join US investment bank Morgan Stanley after what he jokingly calls a period of 'quarantine' and is already practiced at discussing 'ladies' blouses' because of his role at Next and the latest gadgetry in mobile phones.

Although he has avoided accusations of fat cattery faced by many executives of leading companies, he leaves Lloyds with last year's pay of £488,000 and some 2.5m shares in addition to his pension.

Yet, he will not be taking much time to rest. Tomorrow he will announce anew venture with McKinsey management consultants in the insurance business. It is not until Saturday that he intends to hit the place more associated with retirement- the golf course.

Guardian


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