CITY AND SUBURBAN
Lloyds' chiefs run the risk of repeating their biggest mistake
CHRISTOPHER FILDES
The men who run Lloyds Bank chairman Sir Jeremy Morse and chief exec- utive Brian Pitman — make few mistakes, but when they make one, it is a corker. Their biggest so far has been a hostile bid for another British bank. This was Standard Chartered, with its overseas empire. Lloyds need only have asked nicely. Lord Barber, Standard Chartered's chairman, was sym- pathetic, and his finance director favoured the bid and worked for it. Instead, Lloyds went in feet first, waving its cheque-book around like a club — only to find itself completely outmanoeuvred in the market- place, beaten, and about to turn its back on overseas banking. The episode scored Lloyds no marks for strategic planning or tactical execution, only an E for Effort. This week's hostile bid for Midland revives memories which Lloyds might have hoped to live down. Midland after Sir Kit McMa- hon's departure looked about as defence- less as Standard Chartered had looked ear- lier, but Lloyds' approach served only to warm Midland's old flame in Hong Kong — the relationship that Sir Kit had first nurtured. When Midland accepted the Hongkong Bank's bid, Lloyds began a phony war. Its merchant bankers and a public relations firm hired for the purpose poured out a steady drip-feed of stories, some of them published with a credulity that they scarcely deserved. They could be read as charting a determined chief execu- tive's attempts to overcome resistance on his own board. The domestic battle won, he could turn his attentions to the enemy.
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