Byline: Anthony Hilton CITY COMMENT
COMPANY executives can become obsessed with regulators and the threat of Government interference. Years ago in the period shortly after they were privatised, BT and British Gas both became fixated by the regulator and went through a period in which all corporate development, other than manoeuvres designed to thwart or minimise his ability to "interfere", came to a halt.
In the medium term, neither group benefited from the obsession, and neither for that matter did the reputation of either chief executive. Regulation was just one of many issues that management should have managed -- it should never have been allowed to become an obsession.
The impression is growing that Lloyds Banking Group risks falling into a similar trap. It has had a tough time since its all-too-precipitate takeover of the sorely troubled HBOS banking group. But, as the financial markets stabilise, one would expect the newsflow from the group to reflect the progress being made in integrating the acquisition.
Instead, each week seems to bring a new manoeuvre that can only be calculated to keep the European Union competition authorities at bay. While this may or may not seem to be a legitimate goal, it should surely not be pursued to the exclusion of everything else.
That, however, is the impression which is created. A few weeks ago, it was announced that the Cheltenham & Gloucester home loans business would be discontinued, but then within days this was reversed, the only explanation being that senior management realised the continuing business might be useful as a bargaining chip in talks with the authorities.
It is true that bits of the Insight fund management business have gone but shareholders might legitimately protest that they would prefer to see more farreaching signs of integration and costcutting. …