NEWS ANALYSIS: Banks stay silent on credit crunch

Despite the recent dramas in the financial sector and the very real threat of a recession, the biggest British banks have been reluctant to speak about the crisis. David Quainton asks why they are keeping so quiet.

Go to the websites of any of the five big banks (Barclays, HBOS, HSBC, Lloyds TSB and Royal Bank of Scotland), find their search functions and type in 'credit crunch'.

In some cases you will find a small reference hidden in an unrelated article; in others, no reference at all. No site gives advice on what the credit crunch is, or what it means for customers. This does not smack of proactive comms.

In the past six months banks have undergone their worst PR crisis in living memory, from battling with consumers over charges, to engaging in billion-pound rights issues and explaining a £50bn Bank of England cash injection.

Silent CEOs
In most business sectors, as soon as there is the threat of a crisis the first step is to push the CEO in front of the cameras and explain the situation. With banks it is different - in most cases the CEO stays reasonably quiet and hardly ever appears on television.

Indeed, since the recent bout of banking dramas over the past two weeks, although British Banking Association CEO Angela Knight has been visible, none of the banks have allowed any of their senior directors to be interviewed on TV. Only one full interview, by HBOS chairman Lord Stevenson, has appeared in the press (see box).

'In more accessible sectors, such as retail, it is easier to speak on television,' argues Brunswick partner Andrew Garfield, who advises Barclays. 'Banks find that if they put up a chief executive on a flagship news programme they are often expected to deal with complex issues on a simplistic level.'

The problem is that experienced advisers say TV is the best place to get the public on side. Get an appearance right, and a bank could win more ground than through 100 articles in The Banker.

'Many business figures are comfortable rambling one-to-one with a journalist from the FT,' says Cathcart Consulting founder Jackie Elliot, who advises corporate clients on crisis comms. 'But on screen they are woefully out of place. It's like the silent movie stars whose careers were ruined by the first "talkies" because they had high-pitched voices.'

Elliot advises looking across the whole boardroom to decide who should appear. 'There is usually someone senior who can do the job. A good visual appearance can be a hammer blow if done correctly,' she adds.

In the banks' defence, it is clear that in the past six months the frequency of their public statements and media representation have increased.

Most business journalists, though, feel it has not been enough. 'Banks are scared of creating another Northern Rock, so they have avoided communicating,' says Sunday Times business editor John Waples. 'No-one wants to appear to be in trouble.'

Meanwhile, within the banks' comms departments, there have been a number of senior departures recently. Barclays has yet to find a replacement for group corporate affairs director Stephen Whitehead, who left in December. At Lloyds TSB, director of corporate relations Mary Walsh recently departed. At HBOS, Mark Hemingway, head of media for Halifax, resigned after 25 years at the bank.

Rights issues
The banks that have suffered most are those that have announced they are to engage in rights issues. RBS' record-busting £12bn issue and HBOS' equally uncomfortable £4bn issue prompted the CEOs to defend their position. HBOS CEO Andy Hornby asked to be judged in three years, saying the move would be vindicated in that time. But he was also criticised for appearing by video link at the bank's AGM.

'I'm delighted they came out,' says Waples. 'They are stewards of companies that failed and should be held to account. But they should speak more.'

PROs within the big banks defend their silence, but only anonymously.

'Banks are a lightning conductor for broader social or sector issues,' says one. 'It is safer to concentrate on dealing with analysts and business media.'

For one PRO who advises a big five bank, though, the excuse does not stack up: 'Banks should be less afraid of speaking out. Nothing is too complicated that it can't be explained.'

How the banks' media profiles compare

BARCLAYS
Chief executive: John Varley

Head of group media relations: Alistair Smith

Number of press articles featuring quotes from Varley: 17

Chief executive: Andy Hornby

HBOS plc
General manager, group comms: Shane O'Riordain

Number of press articles featuring quotes from Hornby: 21

Number of interviews with chairman Lord Stevenson: 1

HSBC
Group chief executive: Michael Geoghegan

Group comms director: Richard Beck

Number of press articles featuring quotes from Geoghegan: 1

LLOYDS TSB
Chief executive: Eric Daniels

Group comms director: Mark Lidiard

Number of press articles featuring quotes from Daniels: 1

RBS
Group chief executive: Sir Fred Goodwin

Head of group comms: Carolyn McAdam

Number of press articles featuring quotes from Goodwin, or chairman Sir Tom McKillop 37

Media evaluation, by Media Report, from 21 April-1 May.

Would you like to post a comment?

Please Sign in or register.

News by email...