Lord Blackwell is not known as the most activist chairman of a High Street bank.
But as someone who once worked in Downing Street under the gaze of Margaret Thatcher, the Lloyds Bank boss has well-tuned political antennae.
By the time be had succeeded Win Bischoff as chairman in 2014, the bank’s chief executive Antonio Horta-Osorio had rendered the bank safe again after the turmoil of the financial crisis. Blackwell’s interventions as chairman have been limited.
Under the microscope: The Treasury is understood to have been exasperated at Lloyds’ lacklustre embrace of CBILS
He took charge after Horta-Osorio was involved in a tryst while attending a banking conference in Singapore in 2016.
The chairman also played a key role when Lloyds was less than fastidious in taking responsibility for the way clients of the former HBOS branch in Reading were compensated in the wake of a serious fraud.
In the last week or so, Blackwell has been required to step in again.
The Treasury is understood to have been exasperated at Lloyds’ lacklustre embrace of Chancellor Rishi Sunak’s Coronavirus Interruption Loan Scheme (CBILS), designed to keep small- and medium-sized enterprises afloat during lockdown.
Of the £4 billion of loans made since the scheme was up and running, only £618m went to Lloyds clients.
Lloyds put in place a lengthy pre-application process which was forbidding for many borrowers. Blame for a clunky process fell upon Horta-Osorio.
The approach was a big contrast to the slick way in which NatWest’s Alison Rose responded to the challenge. The cumbersome UK scheme has been contrasted with the way in which money to SMEs was swiftly processed in Germany and Switzerland.
Blackwell has once again been galvanised and is making sure CBILS lending is up to scratch amid concern about political scarring. It would be unconscionable if there were to be failures among Lloyds’ SME clients as a result of the earlier log jams.
Virgin roundup
Deal-making in the midst of a pandemic requires a strong stomach. ‘Cable cowboy’ John Malone, who once challenged Rupert Murdoch by building a stake in his media empire, has no shortage of that.
Judged on financials alone, a merger of Liberty-owned Virgin Media with Telefonica-controlled UK mobile operator 02 would look to make sense.
Liberty loves deal making and Virgin cut its debts by selling its German and Eastern European operations to Vodafone for £16.7 billion in 2019 after lengthy regulatory scrutiny.
Heavily indebted Telefonica has been trying to ease the burden for several years. It looked at a range of choices, including a merger with Hong-Kong controlled Hutchison’s Three network, which was blocked by the European Commission.
The Liberty-Virgin deal would be a neat exit, allowing Telefonica to release £3.5 billion of cash. It would provide Virgin with real purchase in the mobile market, adding 25.8m pre-paid and contract customers to its own 3.3m.
The transaction also raises technology and competition issues. O2 has been an innovator.
It is one of the first movers on 5G networks, long before the conspiracy theorists started to vandalise masts.
Telefonica also chose Britain as the hub for much of its R&D activity. As part of a financially driven Liberty/Virgin, it is not clear this would survive.
Even though Virgin is an also-ran in mobile, allowing the biggest operator, O2, access to an additional 3m-plus customers is not likely to improve price or service choice or competition. Brussels has been very sniffy about mobile mergers.
If jurisdiction has moved back to the UK, one would not expect the revamped Competition and Markets Authority to be the pushover it was when it allowed BT to sweep up EE. Malone will not find lassoing O2 easy.
Loss leader
Warren Buffett’s annual meeting was different this year.
Instead of 40,000 worshipful Berkshire Hathaway investors in Omaha, Nebraska, it was just Buffett and a potential successor, Greg Abel, who appeared online.
Buffett’s decision to sell out of US airlines captured headlines. But the bigger shock for investors was the paper £44 billion first quarter write-down as a result of the plummeting stock value of big brands such as Coca-Cola.
Worrying? Probably not. The sage still sits on a £90 billion cash buffer. And there is no reason to worry about a dividend cut. Buffett has never, ever paid one!
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