It says something about the deal frenzy currently gripping the City that while half the financial pages are obsessed with the plans of Barclays and Royal Bank of Scotland to take over the Netherlands-based ABN Amro – in order to create one of the largest banks in the world – the other half of the financial pages are full of stories about how difficult it is to run a huge international bank.
So, as evidence of the stupidity of creating such organisations is available at every hand, the financial powers that be – and ego struck bankers – set about creating another one.
Citigroup is the world’s largest bank and the problems of its chief exec Charles Prince may be partly of his own making. But they also suggest that the place is a hotbed of political intrigue and just too big for one person to manage. Likewise the number two, or possibly now number three bank, HSBC. For years it has been better run than Citigroup perhaps because it has kept a stronger grip on its culture, but the stresses are beginning to show.
It could be the mess in sub prime loans in America. It could be paying bonuses to people who have not met the criteria to earn them outright. Or it could be the story that one branch in Dorset now had a policy that only its most important customers will get counter service (and the others will have to make do with cash machines). This last story has been a complete PR disaster for the bank but that’s what happens when organisations get to this size.
Now it ought to be that PR fiascos like this are an early warning sign for top management. It ought to be that management will see this not as a one off, but rather as a sign that the bank is on the wrong track. But I doubt that will happen. Big organisations say they care about their customers and their image, but they rarely give any evidence of this in their actions – let alone give boardroom status to their head of communications.