City remains in dark on HSBC chief executive Stuart Gulliver’s travel plans
Should I stay or should I should I go? Not the song by The Clash, but the question on HSBC directors’ minds since the bank kicked off its review of whether it ought to move its headquarters.
If the exercise was calculated to extract concessions from ministers for Europe’s biggest lender, it has been adroitly handled: the recalibration of the Bank Levy and reforms to the Senior Managers’ Regime have blunted two of the sharper edges of UK-centric regulation.
Yet there was an intriguing subtext to the comments of Stuart Gulliver, HSBC’s chief executive, this week that concerns about ringfencing had been “dealt with completely satisfactorily” by guidance from the Prudential Regulation Authority (PRA).
There’s more to this than meets the eye. True, regulators confirmed recently that ringfenced banks would be allowed to repatriate dividends to their parent.
But hold on: that had never really been in doubt. Rather, Gulliver’s earlier concerns related to whether bank holding companies would have control of the dividend policy, risk appetite and strategy of their ring-fenced units.
In other words, would the board of HSBC Holdings move from being autonomous decision-makers about the crucial components of a bank’s capital allocation to mere asset managers?
In that respect, little has changed; the rules remain exactly as before.
That begs the question of why the HSBC chief intervened so publicly, particularly as I hear that Andrew Bailey, the PRA chief executive, has been urging bankers to restrict such open remarks on the issue.
Gulliver insisted this week that investors should infer little from his remarks. The guessing game about HSBC’s hometown goes on.
TALKTALK BOSS FIGHTS ON
It’s a familiar formula: no sooner has a corporate crisis erupted than bookies are laying odds on the imminent departure of the firm’s chief exec. The latest victim of this short- termism is Baroness Harding, the boss of TalkTalk, but there have been many others before her – some deserving of the heat, others less so.
It all feels a bit like the Premier League managers’ sack race – but in a less discriminating fashion.
Consider the facts at TalkTalk: the company has been the victim of an apparently criminal action – the hacking into and theft of customer data.
Since then, the company and police have given regular updates about the progress of their investigations, many of which have indicated that the scale of the incident was smaller than initially feared.
That hasn’t stopped it being a dismal affair for TalkTalk’s brand and reputation. It certainly should have trod more deftly in dealing with inevitable demands from customers to cancel their contracts.
But talk of Baroness Harding’s dismissal is ludicrously premature. The company has acted as swiftly as it was allowed to in disclosing the incident. It has appointed external advisers to conduct an independent inquiry.
Chief executives of big companies are paid handsomely to operate in the real world. That doesn’t mean preventing every crisis, but dealing with them decisively when they emerge.
If PwC’s probe finds that TalkTalk was slovenly in handling and protecting customer data, and that executives were careless in remedying this, there will rightly be serious questions about whether the incumbent management can remain in place.
Until and unless that happens, however, TalkTalk of Baroness Harding’s resignation will – and should – remain no more than that.
M&S RESULTS A SPIN TOO FAR
Marks & Spencer got hot under the collar yesterday about journalists’ temerity to report that half-year, pre-tax profit had fallen by more than 20 per cent.
The decline was partly down to a £22m impairment charge related to exiting some European markets, but M&S’s PR machine felt it was “fairer” to focus on the underlying profit performance, which showed a modest improvement.
Of course they did. But since when did the cost to a retailer of closing poorly performing shops not matter to staff, shareholders or its balance sheet?
Here’s some advice to M&S: concentrate on selling more ciabatta and cashmere sweaters, and let the media report financial results as it sees fit.