11 JULY 1987, Page 22


Sir Michael's short-priced loser comes galloping home for Sir Kit


its streets are. The spectacle of the Clydesdale and Northern banks being sold into Australian ownership, with no more fuss than if they were a couple of newspap- ers Mr Murdoch fancied, must make Sir Michael Sandberg laugh on both sides of his face. He was the chairman of the Hongkong and Shanghai Bank when it bid, six years ago, for the Royal Bank of Scotland — to the Bank of England's fury. I wrote here at the time that the Gov- ernor's authority should be supported.

This brought me a courteous message from Sir Michael: he looked forward to another evening at the Sha Tin races, when he would, as before, be my host, and would tip me six short-priced losers. The Gov- ernor, though, got his way, by dint of an absurd report from the Monopolies Com- mission, which said that taking over the Royal Bank would reduce the career opportunities for Scottish bankers. Now taking over the Clydesdale is all right, so long as it gets its owner, the Midland, and its new (Australian) chairman Sir Kit McMahon, out of a hole. As for the Clydesdale's bankers and their careers, those from the clan McMahon always found a dynasty in Botany Bay. . . . So, what, now, is sacred? The Big Four banks themselves, almost certainly. The Royal Bank, the Bank of Scotland, the TSB, Standard Chartered? The accepting houses? Where the Bank of England sees a national interest in keeping a British pre- sence in an international market, that is still likely to be defended, with the new powers from this year's Banking Act. The debacle of Lloyds' bid for Standard Char- tered may itself serve as a deterrent against hostile bids for banks. But membership of the Accepting Houses Committee, the traditional inner circle of merchant banks, can no longer guarantee shock-proofing.

Indeed, seeing Singer & Friedlandler, the Accepting House of Bray, change hands for the umpteenth time, I wonder what membership still guarantees. The Bank of England will take the bills of more than a hundred banks, but I doubt if it says of them, as it used to say of the accepting houses, that they are good without ques- tion for all their commitments. To the question of what is sacred, we have the official answer: suck it and see.