Age 60PositionSeniorindependentdirector,Direct LineGroup

I t’s worth recalling, as argumentsfly back and forth on the proposedmerger between BAE Systems and

EADS, how differently thingsmighthave turned out for Britain’s premierdefence contractor.The story of BAE’s abortedmergerwithGermany’s DaimlerChryslerAerospace in late 1998 is well known,as is the fact that, before themootedEADS deal, BAE spoke toRolls-Royce, only to be rebuffed by itschairman Sir SimonRobertson.Less well known is just how close, adecade ago or so, BAE came to pullingoff a remarkable deal in theUnitedStates. Under its former chairman andchief executive Phil Condit, Boeingmulled hiving off its civil aviationdivision, for which there would havebeen no shortage of private equitybuyers. The game plan then, it seems,would have been to pursue amergerwith BAE that would have created atransatlantic defence powerhouse.Unfortunately, the boards of bothcompanies could not agree onwhether this was an appropriatestrategy, with BAE’s ownership ofa 20 per cent stake in Airbus, Boeing’sarch-rival, seen as a stumbling block.BAEwas in a happier place thenthan now. Back then, it enjoyed plentyof alternatives. There is no plan B tothe EADS tie-up today.

Barclays

HSBC RB

S

Natwest

LloydsTSB

Halifax

Santander

Nationwide

BankofScotland

Moneysupermarket

Other

0%

5%

10%

15%

20%

MoneySupermarket

HSBC

Barclays

Halifax

MoneySavingExpert

LloydsTSB

Nationwide

Natwest

Santander

Co-operative Bank

0%

5%

10%

15%

20%

25%

30%

MoneySupermarket

MoneySavingExpert

Barclays

Halifax

LloydsTSB

Moneyfacts

Fool

lovemoney

ThisisMoney

Legal &General

0%

5%

10%

15%

20%

25%

MoneySupermarket

TescoBank

Comparethemarket

Co-operative Bank

Elephant

Confused

Admiral

Swiftcover

MoreTh>n

MoneySavingExpert

0%

5%

10%

15%

20%

21.8%

21%

14.7%

12.1%

8.3%

8.2%4.8%4.4%

Payday loans

Mortgages

Loans

Travel insurance

SavingsCredit cards

Home insurance

Current accounts2.6%

Life insurance2%

Search bymarket typeMost visible brandby digitalmedia typeMay/June 2012

Santander

4,197,376views

MoneySavingExpert

76,683followers

Tesco

827,051fans

Volume by keyword

Tesco 827,051

ComparetheMarket 814,853

Sainsbury 433,189

Lloyds TSB 66,439

MoneySavingExpert 37,749

Money Supermarket 35,703

HSBC 26,625

Confused 21,209

Halifax Bank 15,917

First Direct 15,249

MoneySavingExpert 76,683

Sainsbury 53,002

ComparetheMarket 52,989

Tesco 32,070

Halifax Bank 8,240

Natwest 7,975

HSBC 7,136

Lloyds TSB 6,702

Money Supermarket 6,394

Confused 4,490

Top financial searches

Top 10 results when Googling current accounts% click share, Dec 2011 to May 2012

Top 10 results when Googling car insurance% click share, Dec 2011 to May 2012

Top 10most visible financialbrandswithin FacebookNo of fans May/June 2012

Top 10most visible financialbrandswithin TwitterNo of followersMay/June 2012

Source: StickyeyesGRAPHIC: STEVE LATIBEAUDIERE FOR THE TIMES

Financial brand related search by volume% share

Top 10 results when Googling savings% click share, Dec 2011 to May 2012

Glyn Jones

Hewas hired once beforeto float a business and itnever came off. NowGlyn Jones, the formerchief executive of

ThamesRiver Capital, has anotherchance to help to steer a business to a

stockmarket debut, having beenhired yesterday as the seniorindependent director of Direct LineGroup.Mr Jones led ThamesRiver foronly sevenmonths in 2005-06 beforethe hedge fund group decided not tofloat after all. It was taken over byF&C later.Royal Bank of Scotland aims tofloatDirect Linewithin the next fewweekswith a price tag of about£3 billion. The bank has to offload thebusiness by the end of 2014 and isexpected to sell more than 25 percent of its holding in the first tranche.Mr Jones— the chairman ofAspen, aNewYork-listed reinsurer,where hewas paid $811,000 last year— ranGartmore, the fundmanager,for four years until 2004, departing

with a £3 million pay-off. Before thathe headed the private bank Couttsfrom 1997 to 2000. Direct Line saidthat he had no financial links withRBS, which once ownedGartmoreand still owns Coutts.Heworked for six years atStandardChartered inHongKongand before that he was a consultantwith Coopers& Lybrand andDeloitteHaskins& Sells, where hemainlyadvised financial services clients. Hehas also been chairman ofHermes,the pension fundmanager, andTowryHoldings, the independentfinancial advice firm.Direct Line alsoMark Catton, headof corporate and institutionalbanking at RBS, as anothernon-executive director.(PatrickHosking)

$ per £-0.00511.6199

This time BAEhas no plan B

Currencies

The markets

I ncredible as it may seem, somegoodmay yet come out of thescandal at Bumi plc, whose ability

to shock never ceases to amaze.That will not console those whoinvested in this diseased company at£10 a share at its IPO, in July 2010, andhave lost 85 per cent of their money. Itwill be no consolation toNatRothschild, who brought Bumi to theLondonmarket and who, via an11.94 per cent stake, shares their pain.Neither will it console Sir Julian

Horn-Smith, Lord Renwick of Clifton,Sir GrahamHearne and the othernon-executive directors of thiswretched business, nor their advisers,as they try to explain governancescandal after governance scandal.Yet the saga has ensured that, whennext a companywith Indonesianassets seeks to list in London, it will besubjected to rathermore scrutiny andtough questioning thanwas Bumi.It is perhaps asking toomuch of theIndonesian regulators that theywillinvestigate these allegations robustlyand, if necessary, bring prosecutions.If they do, though, it will doIndonesia no end of good as it seeks toshed its unwanted image as one of theworld’smost corrupt countries andattractmore foreign direct investment.Whether Bumi Resources wouldsurvive such a process is anothermatter.

T he rise of Barclays Capital hasrather killed the “WimbledonEffect”— the notion that, while

Britain had no investment bankingchampions of its own, it was still themost agreeable place for the rest of theworld’s top players to compete.Now theCity is betting we do nothave long towait before a domesticwinner at the Championships itself.Keith Prowse, the UK’s leadingcorporate hospitality provider, saysthat since AndyMurray’s victory attheUSOpen, enquiries for next year’sWimbledon are up by 125 per cent.If the Scot does notmake theNewYear’sHonours for his heroics inNewYork, not tomention theOlympics,perhaps he could be honoured forservices to corporate hospitality.

Commodities

W hy is it most people havebought the idea that thecollapse of JJB Sports began

with Chris Ronnie’s appointment as itschief executive in 2007?Yes, much of the blame should go tothe haplessMrRonnie. But it was nothewho incurred thewrath of JJB’srivalMike Ashley by telling him:“There is a club in the north, son, andyou’re not part of it.” That, of course,was JJB’s founder DaveWhelan, withthe upshot thatMrAshley reportedJJB to theOffice of Fair Trading. Itwent on to impose a £8.373 millionfine, a huge blow at the time.Norwas itMr Ronnie who, in 2004,turned down a £600million offer forJJB fromCinven because it was notenough. That wasMrWhelan, too.And nor was itMrRonnie whofailed to respond rapidly enough toMrAshley’s aggressive price cuts. ThatwasMrWhelan and former chiefexecutives, such as TomKnight.The late, great retail analyst RichardRatner said in January 2006: “JJB haswoken up towhat Ashley has beendoing and is trying to respond. It willget killed. Ashley is a better buyer.”As ever, “Ratty” was on themoney.

MThT W F

6,000

5,800

5,600

5,400

5,200

T MW Th F

120

115

110

105

100

1.630

1.600

1.570

1.540

1.510MWT FTh

PatrickHosking Financial Editor

The acquisition of the advice websiteMoneySavingExpert has putMoneySupermarket on course toincrease its dominance of onlinefinancial search, according to newresearch.The popularity of the pricecomparisonwebsite has been laid bareby a study of which banks and financialinstitutions appear at the top of therankings when consumers search forfinancial terms inGoogle.It also shows howmainstream banks

and insurers are competing for visibility,with Barclays emerging as themostsearched-for brand in finance, followedclosely byHSBC andRoyal Bank ofScotland.When computer users search forspecific financial categories, such as“current account” or “car insurance”,MoneySupermarket dominatesmostareas, withMoneySavingExpert alsohigh up inmany rankings.MoneySupermarket, whichcompleted the £87million acquisition ofits rival last Friday, leads theway in both“organic search” and in “paid-for”

advertising.Organic search producesresults based on a complex, constantlyrefined algorithm devised byGoogle andaimed at producing themost useful,comprehensive information tocomputer users. Paid-for entries, whichsit alongside organic search results, aredetermined by auction, with themostprominent results given to biddersoffering themostmoney to Google perclick.“Collectively, as an organisation,MoneySupermarket will have asignificantly increasedmarket share,”said PhilMcGuin, head ofmarket

research at Stickyeyes, the onlinemarketing agency behind the research.In the savings area, for example,MoneySupermarket already has aclick share of 27 per cent.MoneySavingExpert has a further 16 percent.The deal was cleared by theOffice ofFair Trading.MoneySupermarket saysthat it is committed tomaintainingMoneySavingExpert’s standing as beingfree from commercial considerations.Banks employ search optimisationconsultants to tweak their websites in anattempt to climb theGoogle organic

search rankings.Marketing productsonline has become a crucial part of theadvertisingmix and the dominant wayof selling some products, such as carinsurance.The research also shows thesuccess of the supermarket groups inboosting their online presence. Tescoand J Sainsburywere first and third forFacebook fans.Santander was themost-viewedfinancial keyword onYouTube, ahead ofCompareTheMarket, the pricecomparisonwebsite known for itsmeerkat advertising campaign.

CarbonEua (Dec 12)-0.16¤7.27

¥per £-0.81126.20

¤ per £+0.00371.2545

Nasdaq-19.183,160.78

DAX-38.467,413.16

Supermarket sweep makes comparison with rivals more difficult Big shot

Brent Crude-1.83$108.59

Business Editor’s Commentary

Copper-126.50$8,155.25

$ per ¤-0.00761.2912

ian.king@thetimes.co.uk

EmploymentTips to beat thestudent jobs scramble

Gold London-11.15$1,763.50

InsuranceRelief for motoristsas premiums fall

¥per $-0.2777.90

Dow Jones-20.5513,558.92

Eurofirst 80-25.883,366.23

Nikkei-40.719,069.29

Platinum-9.00$1,630.00

S&P-3.261,456.89

For services toindustry . . .

Give creditwhere it’s due

AlexRalph

Small businesses called for a return totraditional banking yesterday as theparliamentary commission set up afterthe Libor scandal took to the regionsfor the first time.Companies in Birmingham told across-party panel of MPs at the com-mission’s first roadshow that theeconomy would not recover unlessbanks ended the “computer says noculture” when determining whether tolendmoney.In an informal discussion at Birm-ingham Chamber of Commerce withabout 20 small and medium-sizedenterprises, the Parliamentary Com-mission on Banking Standards wastold that the relationship betweenbank managers and businesses hadbeen replaced by a “matrix” and “tick-box system”.Pat McFadden, the former shadowbusiness secretary and lead memberfor the commission’s panel on the con-sumer and SME experience of banks,said businesses “are not calling forlending conditions that existed beforethe financial crisis. They want a morepersonal relationship in banking.Moreunderstanding of their business. Moreexplanation of decisions.“A lot of them feel the decisionnot tolend is arbitrary. A ‘computer says no’culture.”John Thurso, the Liberal Democrat

MP for Caithness, Sutherland andEasterRoss andamember of the panel,said: “The human element seems tohave vanished. It’s become a matrixand, if you don’t tick the boxes of thematrix, you don’t get themoney.”John Mason, who runs three hotelsin the West Midlands, said that busi-nesses needed access to “relationshipmanagers” at banks who understoodthe business.He said therewas “no oneto talk to” and that “IT has taken over”.Steve Brittan, the managing directorof BSA, which makes systems for thedefence, aerospace and automotiveindustries, said that the long-standingrelationship between bank managerand small businesses was finished.“Over the last five years or so, you’velost the relationship manager, the manwho knew your business. We were get-ting young kids coming in, taking notesback to the credit team who didn’tknow you and theywere saying ‘no’.”Wade Lyn, the managing director ofCleone Foods, which supplies Jamai-can patties to supermarkets, said thatBarclays had turned down a £50,000loan but the business had been savedfrom collapse by a £150,000 loan fromfamily and friends. He said that thecompany hadmoved to Lloyds.The commissionwill gather evidenceon corporate governance, the regulato-ry and supervisory approach and com-petition and make recommendationson legislative changes byDecember 18.

Life imitated art yesterdaywhen, hours after the BBCTwo satireThe Thick of Itshowed a clueless Lib Demminister hatching the idea of

a small business bank, up poppedVince Cable to announce the realthing. Unfortunately, the Bank ofCable is as poorly conceived as the“WeBank” planned by the fictionaljuniorminister FergusWilliams.For a start, the new bank appears tobe dependent on existing lenders, aswith the failed ProjectMerlin. Thenew bankwill need to offer genuinelynew lending channels.Second, whatmakesministers thinktheir creationwill be any good atmeeting demand for credit? TheGovernment’s ownRegional GrowthFund hasmanaged to invest only£60million of a possible £1.4 billion.Even if its £1 billion seed capital isleveraged to the power of ten, it is hardto see the new bank doing better.Third, the risk to taxpayers is huge.The new bank, it seems, will buy booksof SME loansmade by existingcommercial lenders. That looks like agolden opportunity for the latter to getsome rubbish off their books and into astate-owned “bad bank”.Moreover, the loan applicationsmade to the new bankmaywell provedubious. RBS currently approves90 per cent of SME loan applicationsand Barclays, HSBC and Lloyds about80 per cent. Imagine the quality of theproposals they reject.Why shouldtaxpayers bear the risk of loans the bigbanks decline tomake?Lastly, this bank will take 18monthsto set up, which is too long. By then itruns the risk of being, asThe Thick of Itmight put it, the last VHS inOxfam.

Business briefing

Exclusive to subscribers

FTSE 100-13.785,838.84

Call to end‘computersays no’banking

6Royal Bank of Scotland is to cut anadditional 300 jobs in its investmentbanking division (PatrickHoskingwrites). The state-controlled banksaid that it aimed to reduce staffinglevels in its markets division by3,800 by the end of 2013. Previously,it had set a target figure of 3,500.The unit has already pulled backfrom some equities andmergersand acquisitions activity.

thetimes.co.uk/money

Ian KingThe facts are evenstranger than fiction

Famous namesshare the pain

32 FGM Tuesday September 25 2012 | the times

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