Well, would you look at Mark Carney. Just three months ago I described the incoming prime minister of Canada and former governor of the Bank of England as ‘a fish-out-of-water technocrat’ who made little public impact over here and was swiftly forgotten after he left in 2020. When I once came across him hunched and dark-suited in the Pret queue at King’s Cross, midway through his Bank tenure, I actually felt sorry for him.
But here he is, beer-swigging in an Ottawa bar with Sir Keir Starmer; cutting Donald Trump short in a press call before the G7 meeting; shedding his eco-credentials to champion Canadian oil and gas; and generally looking the statesman at ease with his people. What happened?
A Canadian connection tells me the answer is all to do with Carney’s paternal ancestry in Ireland’s County Mayo: ‘He’s unleashed his inner leprechaun and he’s on a mission to make mischief for the big orange buffoon south of the border. What’s more, the ladies think he’s hot.’ It makes me wonder about his charisma-free Bank of England successor, Andrew Bailey, who has barely been seen in public this year. What leap on to the world stage might he be planning for his next career?
Fever in the air
Would a flurry of merger-and-acquisition activity in the banking sector constitute evidence of rude health – or a cyclical warning of troubles ahead? Metro Bank, the glossy but struggling high-street challenger, is being stalked by a private equity outfit called Pollen Street Capital. Santander last month rejected an £11 billion offer for its UK network from the reinvigorated NatWest. TSB, the former Trustee Savings Bank that was sold by Lloyds to Banco Sabadell of Spain a decade ago, is for sale again with its five million customers, while Sabadell itself fights off a takeover bid from its domestic rival BBVA. All across Europe, says one LinkedIn commentary, ‘bank M&A fever is in the air’.
Behind all this is a growing belief that expansion by takeover might now be a better use of surplus capital than share buybacks – and will deliver economies of scale in a sector that would benefit from consolidation to fight digital disruptors. The counterargument is that all banking mergers, especially across borders (as Sabadell discovered with TSB), are fraught with management conflicts and incompatible IT systems. And ambitious bidders who claim they’re building regional or global champions are too often tempted to overpay. Caveat emptor – and let’s hope the regulators stay ahead of the new game.
Flight risk
A news story with painful implications for London’s insurance market has reached a largely unnoticed turning point – though perhaps not a final conclusion – in the High Court. This is the £3.4 billion case of 147 commercial aircraft which had been leased to Russian carriers but were effectively stolen on 10 March 2022, days after Vladimir Putin’s invasion of Ukraine, when Moscow legislators made it impossible for the planes to be repossessed by their lessors – of whom the largest is an Irish company, AerCap.
Insurers led by Lloyd’s of London refused to pay out on the lessors’ ‘war risks’ cover, but Mr Justice Butcher has now ruled that they must, on the grounds that the loss is not a commercial matter but the result of an act of the Russian state. As indeed it was: my man who tends the Kremlin vegetable plot tells me this was a carefully pre-planned heist which won promotion for the aviation minister responsible.
Meanwhile, the insurers are also being pursued in the courts of Dublin, the world capital of aircraft leasing. But the hope is that settlement will now be reached between all the western parties and their well-remunerated lawyers, while the lost fleet continues flying within Russian airspace for as long as its operators can source illicit spare parts.
A curious sidelight on the way the money world works is that I happen to be a trustee of a small Yorkshire charity which is awaiting a payout of a different kind, in the form of a legacy from a deceased benefactor who happened to be a Name on some of the Lloyd’s underwriting syndicates that insured the aircraft in question. So our transformational bequest will be reduced, at several removes, by the evil hand of Putin.
Pottery dame
In a birthday honours list on which business barely got a look in, I was delighted to see a DBE for the potter Emma Bridgewater, whose cheerful mugs and bowls fly the flag for the traditional craft of Stoke-on-Trent in defiance of foreign competition. After starting her venture 40 years ago because she could not find a cup and saucer she liked as a present for her mother, Bridgewater built it up to employ more than 450 people and achieve peak annual sales in 2022 of £38 million. But it has since fallen into losses and ‘workforce optimisation’, so I hope the gong encourages her to battle on.
I’m confident she’ll do so, having encountered her feistier side a couple of years ago in a ding-dong debate over dinner at the Aldeburgh literary festival. The trigger was a reference by me to another Stoke-on-Trent venture with a female chief: namely the Bet365 sports betting empire led by the UK’s highest-paid executive, Denise Coates, who I have also occasionally praised here for her entrepreneurial thrust and whose personal pay package is a multiple of the Bridgewater company’s entire turnover.
Insensitively, I argued that in the evolution of 21st-century capitalism, regulated online bookmaking is as worthy as manufacturing if it brings new wealth, jobs, tax revenues and philanthropic funding to the post-industrial Potteries. The riposte was fierce, but if there’s ever an opportunity for another round, I think I might add that honours, as it were, are now equal: Coates has pots of money but Bridgewater’s pots have made her a Dame.
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