Royal Bank of Scotland is at last about to dump the ‘RBS’ logotype promoted by its fallen chieftain Fred Goodwin, who thought ‘Scotland’ too parochial for a bank with global ambitions, though he was famously keen on royal connections. The wonder is that this decision has taken seven-and-a-half years since the bank was saved by £46 billion of taxpayers’ money.I suppose Goodwin’s successors, now led by Ross McEwan, have had too many other fires to fight, what with losses piling upon losses (first-quarter results twice as bad as last year’s), delays in the spin-off of the Williams & Glyn subsidiary, computer problems, and a looming scandal in the Swiss branch of Coutts, the group’s wealth arm.
But it was ever thus in large banking groups, and recognition that the parent brand was terminally tainted — while those of subsidiaries such as NatWest and Ulster Bank were still capable of rehabilitation — should have come much sooner. All this is tied up with a belief in the Treasury, prompted by McEwan’s predecessor Stephen Hester, that a higher sale price will eventually be achieved for the taxpayers’ 73 per cent stake in ex-RBS if it is largely held together rather than sold in chunks.
I beg to differ: I believe it will only be saleable if broken up, and I’m hoping this de-branding might prepare the ground. Meanwhile, I gather that NatWest — in which the group’s corporate lending will henceforth be focused — would like to be seen as a reinvigorated ‘challenger’ specialising in the lost art of relationship banking: that’s a worthy aspiration.
Don’t call me AOB
It’s a useful rule of thumb that any business which reduces its name to its initials is heading for trouble. Having gone that way under Goodwin, RBS almost doubled down last year by becoming the lower-case ‘rbs’, before apparently thinking better of it. British Petroleum became ‘BP’ after its 1998 merger with Amoco, tried to claim a greener image by suggesting that the B might stand for ‘Beyond’, and has never really been stable since. ‘British’, like Scottish, was evidently an unsuitable tag for a global player.
Likewise BG, the former exploration arm of British Gas, was an unhappy ship for years before its recent takeover by the robustly unabbreviated Royal Dutch Shell. The homely British Home Stores became faux-trendy BhS (later Bhs and BHS, as if it made any difference) as the lost sheep of the Storehouse group, following its merger with Habitat and Mothercare in 1986; when the full name was eventually revived in small print below the big letters, it was too late.
You’ve probably got the gist of this theory by now, but I’ve always wondered why Kentucky Fried Chicken — as part of a lacklustre fast-food division of PepsiCo in the early 1990s — reduced itself to ‘KFC’. Some say it’s because ‘Fried’ sounded bad, even though pressure-frying in super-hot oil was what most customers thought made the product ‘finger lickin’ good’. Others claimed that it was because the product wasn’t actually ‘Chicken’, but meat of a factory-bred featherless mutant. That — I hasten to add — was categorically an urban myth.
Zero to hero?
This column may be the only one in the national press that has ever said anything kind about Mike Ashley, the Sports Direct tycoon and Newcastle United owner — even if some of my remarks were tongue-in-cheek. So I’m pleased to see Ashley poised as the white knight of BHS, having revealed that he’s contemplating a bid for the chain in which there ‘would not be any job losses… and all stores would remain open’.
That would be a remarkable outcome, but for all his rebarbative traits Ashley is, as I wrote here, ‘a remarkable self-made success story’. And if the rescue happens it will tie his detractors in knots. MPs of all colours are exercised over billionaire former BHS boss Sir Philip Green’s ripping out of giant dividends on behalf of his Monaco-based wife and his sale of the business for £1, leaving huge pension liabilities: it was a Tory who resorted to that tired cliché, ‘the unacceptable face of capitalism’. Ashley is also a billionaire, and is hated by the left for his allegedly ruthless employment practices at Sports Direct. Both are likely to resist summonses to be grilled by the Commons business select committee. But 11,000 BHS jobs rescued, even on Ashley’s terms, would be a lot better than 11,000 jobs lost; he will go from zero to hero, and I will feel quietly smug for having stuck up for him.
The other Ranieri
The world now has two famous managers called Ranieri. One is Lew Ranieri, the corpulent monster of Salomon Brothers’ 1980s New York trading floor. Thanks to Michael Lewis’s Liar’s Poker, that Ranieri is forever associated with ‘Food Frenzy Fridays’ — vast pig-outs of Mexican and Italian takeaway — and the observation by a fellow trader that ‘Lewie would piss on your desk’. He was eventually fired by Salomon and withdrew into sulky seclusion before returning to become even more notorious as the progenitor of the mortgage-backed securities market that nearly destroyed the global banking system. He was named by Time as one of ‘The 25 People to Blame for the Financial Crisis’.
The other Ranieri, four years younger, is Claudio, the heroically understated manager of Leicester City FC. We’re all now studying Claudio’s management techniques as closely as stock-pickers soak up the wisdom of Warren Buffett. I note so far that he relies on solid defensive strategies, rarely bothers with new tactics and changes of line-up, and has no truck with excessive pay for so-called stars. He also keeps his cool and his dignity when events run against him.
So I think I know which Ranieri I would pick to look after my investment portfolio. But I also see that Claudio, like Lew, likes to throw pizza parties for his team. I wonder whether they are related?