Dark-horse contender

Lloyds TSB has an enviable customer base and an unmistakable brand image, but it has rarely been competitive in trade finance. Now, however, it has secured a seasoned leader in Peter Sargent and is ready to finally throw its hat in the ring.

Q: You’ve been at Lloyds TSB for nearly three months. How is it going so far?

A: It’s quite different, but in a positive way. What I’ve found here is a very knowledgeable, hardworking and loyal staff, who perhaps lack a bit of direction and are rather defensive in the sense that they don’t market the breadth of products that they would like, and I think they’ve felt a little bit brow-beaten for the last few years. So my job, to a certain degree, is to be their champion.

We have 52 staff in the front office, divided about 50-50 between London and the regions. It’s very important to keep that regional bias because it’s a competitive advantage for us. We have local people who sell to local people and understand their needs, and that’s different from our competition, who concentrate most of their people in London.

My job is also to give direction and focus to the business. We currently try to cover too many customers and our sales people are too driven by customer service and not by sales. We have to find a happy medium between the relationship-driven approach of most European banks versus the transactional approach of most American banks. If we can perch ourselves in between the two, then we’ll reach our potential and be quite different from our European competition and our American competition.

Q: What led to your decision to join Lloyds TSB?

A: I’ve always made it quite clear that, at some stage, I’d like to take the knowledge I gained in international banking and use it for the benefit of UK importers and exporters. So when I was approached about this job, it was quite an easy choice. It was a chance to put into practice some of the management theories that I’ve built up over the years. Citibank is probably the best place I can think of to learn management theory, and Lloyds TSB gives me the opportunity to see if I can build the practice on the theory.

There are times when you should join institutions, although it’s difficult to define. I got the impression it was a time of change at Lloyds TSB, and the bank was trying to move itself from what it had been – with its rather staid image – to an organisation that is much more customer driven and much more proactive. It seemed an exciting time to move here.

Q: What personal strengths or skills do you bring to the job?

A: I’ve got more than 25 years in the trade business so I understand the market. I like to think I understand what customers need; these days, so many banks produce products without thinking about how they meet customers’ needs. What we want to try to produce is something that is fixed on exceptional customer attention – not just customer service but exceptional attention to the customer.

I’ve also got technical knowledge and an understanding of the techniques behind international trade, and I want to try to use some of that understanding to expand Lloyds’ product offering. One of the reasons for going to Citibank was to learn more about management skills and strategy. I’m hoping that this combination of product skills, management skills and the people skills I’ve learned by running teams over the last 20-odd years can be put in place to drive this business in the right direction.

Q: What are your goals for the short and long term?

A: One of the things I always find interesting is that a lot of people in the trade world take an entirely transactional view of trade finance. I think there’s a gaping hole in market knowledge. Many people are extremely good at doing deals, but few have a clear understanding of how a strategic approach to the trade business works. We want to take an entirely different approach. I’ve got 52 people on my sales team and, in my first 30 days, I made an effort to talk to as many of them as possible. I got some interesting reactions.

We distilled all the comments our sales team made into six defining guidelines; these are the strategic aims that are going to drive our business. The first two relate to clients. We need to focus on the customer. We will be reorganising ourselves to face outwards rather than inwards and to be much more driven by sales techniques and business management. In addition, we need to create product differentiation and expand the breadth of our product offering.

The third and fourth guidelines relate to delivery. We want to deliver exceptional service and seek a real shift in product delivery, and that inevitably means having the ability to offer web-based trade services and cash management. So that will be a fundamental change in the way we do our business.

The last two guidelines are both staff-related. One is to recognise employees for performance, which is not perhaps what this bank was used to. We have to accept that exceptional performance will be rewarded exceptionally and that non-performers will not be rewarded, should they remain here. And we have to make our people the best that they can be. What that means is that people should be looking for a career and not just a job. Too many people in the trade-finance world are employed for a job and will sit there until they are 60 and retire unless they make something happen for themselves. The whole idea of having a big team, with 80 people in the London back office, 200 people in the Birmingham back office and 50 people in the front office, is that you can provide a proper career structure and bring your better people up through the ranks.

Q: How do you view Lloyds TSB’s strengths and weaknesses in terms of trade-finance offerings?

A: Trade finance is part of Lloyds TSB Corporate. Historically, Lloyds TSB is excellent at two things: structured export finance and serving the distinct needs of smaller importers and exporters. If you think of trade products as being up to 20 in number, Lloyds TSB is very good at numbers one through four and quite good at numbers 16 through 20, so what I have to do is gradually push at both ends of the market to close that gap. Lloyds TSB has an exceptional customer franchise, as well as an exceptional brand identity with the black horse; it’s probably one of our biggest advantages.

Q: So do you plan to focus equally on the full range of products rather than specialise in a few core products?

A: We want to excel in meeting our customers’ needs; to do that, we need to offer the whole range of trade products, but we have to be able to deliver it in a superior fashion. And that’s one of the areas where most banks fall down.

Q: Can Lloyds TSB become a big name in trade finance?

A: Trade banks divide into four categories: global banks (Citi, JPMorgan, HSBC, Deutsche), international banks (Standard Chartered, ABN Amro, the French banks perhaps), regional banks (Royal Bank of Scotland), and savings and domestic banks. At the moment, we sit somewhere between the regional and international categories. We’re never going to be a global bank. There is absolutely no point in us trying to chase after the coattails of the big banks; that would be a recipe for disaster. But what we can do is work very carefully to move ourselves into the international category, and to begin to compete with other European trade banks. In short, I don’t see us being a global player and I don’t see us being a UK player; I see us being a European player, obviously including the UK market. Part of our vision is that, within three years, we will become the premier European trade bank. That doesn’t mean the biggest; it means the best. Realistically, we’re not going to be another Citibank or JPMorgan, but we can focus on what we do well and deliver it to customers in an exceptional fashion.