21 NOVEMBER 1987, Page 29

Sir Kit's £1,486m rabbit

ENJOY Sir Kit McMahon's flair as he pulls rabbits out of the Midland Bank's hat, but do not let the quickness of his hand take your eye away from what he is doing. His alliance with the Hongkong Bank, which is subscribing for new shares in Midland to achieve a 15 per cent stake, will mean that so far this year Midland has reinforced its balance sheet with £1,486 million in cash, and provided an extra £1,016 million for bad debts. These must be seen as prepara- tions for stormy weather around the world, when all banks will find that their debts, old and new, will deteriorate, and capital and cash will be vital. Sir Kit, like the stock market, has a message for us.