A safe approach is not sexy but it is what the financial industry needs, according to one of the last top rated banks in the world

News - Banking

Written by Ray Clancy

Friday, 19 March 2010 09:19

Financial regulation needs to meet the needs of a wide variety of players and a one size fits all approach will not work in terms of avoiding the excesses that led to the global downturn, it is claimed.

A common sense approach is required in the new enhanced regulatory environment that is currently being thrashed out across the world, according to the head of Clydesdale International Bank, whose parent company, National Australia Bank, is one of the last remaining long-term AA rated banks remaining in the world.

‘Regulators need to look at individuals and institutions as both have to put their houses in order. Being restrained and conservative may not seem very exciting but it is perhaps what is needed,’ said James Blower, the bank’s managing director whose team is based in Guernsey.

‘We are not sexy, boring some might say, but we are safe. In 2007 that approach was not popular but out conservatism and traditional approach to banking are attributes that are now in our favour especially when compared with banks like RBS,’ he added.

Despite challenging times Clydesdale Bank International has bucked market trends and displayed capital strength and stability during the downturn. This was most notable in September last year when total deposits reached the £1 billion milestone and earlier this year when it reported significant growth in the third quarter of 2009, even as bank deposits fell generally in Guernsey.

‘This was our fifth consecutive quarter of double digit growth which is an outstanding achievement for the Guernsey operation. Whilst it is evident that the island’s deposits are stabilising, over the fourth quarter of 2009 total bank deposits in Guernsey fell by 2.3%, while our deposit base grew by 19%,’ explained Blower.

He believes that a safe option is now what many investors, both corporates and individuals, are seeking. ‘It has been an exciting year for the bank and we now have an 18 strong team dedicated to serving our members’ offshore requirements. At Clydesdale we are always thinking beyond banking and our traditional values are reflected in our strong customer services focus,’ he said.

He also believes that the new 50% tax for high earners in the UK will push them away. ‘It is a very real issue. Talking to businesses in Guernsey it is clear that people are talking of moving away on a permanent basis. It is a reality, not just talk,’ said Blower.