FILE PHOTO: Signage is seen outside of a Metro Bank in London, Britain, May 22, 2019. REUTERS/Hannah McKay/File Photo
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Craig Donaldson’s imminent departure as chief executive of Metro Bank, just nine weeks after the exit of founder-chairman Vernon Hill, might be explained by an anecdote from a fintech entrepreneur. For several years, the entrepreneur sought to borrow from the challenger bank. But, each year, he was shown into Mr Hill’s office only to leave minutes later empty-handed — except for another signed copy of the chairman’s inspirational book. Then, one year, to his surprise, Mr Hill agreed to a deal, flung open his office door and bellowed: “Craaaaaaig! Get in here! Now!”

This view of Mr Donaldson as a mere implementer of his ex-chairman’s strategy would certainly suggest one reason why he is now surplus to requirements. However, evidence beyond the anecdotal indicates that Mr Donaldson has been more active defender than passive facilitator of Metro’s strategy — and is leaving for unconnected reasons.

Metro aimed to challenge in the mortgage and corporate lending markets — and it was Mr Donaldson who led the fight for a level playing field here. He pushed for Metro to be allowed the same lower capital requirements as the big banks from this year onwards. But he was made to wait until 2021. In the meantime, ringfencing regulations have forced big banks to deploy their UK deposits in the mortgage market, starting a price war that hit the margins of smaller scale, branch based rivals like Metro.

Metro aimed to be well capitalised but its financial position was thrown into doubt by a misreporting of risky loans — and it was Mr Donaldson who worked to stabilise a situation that Mr Hill seemed keen to gloss over. Amid a regulatory probe, he led a rescue fundraising — and his departure now, but retention as a consultant for 12 months, suggests the regulator will report imminently but exonerate him. Mr Donaldson also managed the resolution of a failed bond issuance, after unwilling investors cited Mr Hill’s governance style as an obstacle.

Metro tried to differentiate itself as a branch-based bank, too — and Mr Donaldson understood this meant offering more than Mr Hill’s gimmicky dog bowls. His delivery of high service levels has built a customer base of 2m — as big as digital rival Monzo, and rather proving FT Alphaville’s contention that Metro can be “Monzo for old people”.

Indeed, Mr Donaldson was arguably a more pragmatic believer in the strategy than his inspirational book-signing chairman. It’s just that — after those capital scares and a 90 per cent share price fall — the City can no longer believe in him. However, if his departure is more about credibility than strategy, then interim boss Dan Frumkin might not feel a need for major change in February’s transformation plan. He could choose slower branch and loan growth, with more cost control, over a £1.7bn loan book sell-off. That might prove better news for shareholders — if not entrepreneurs seeking more finance.

Ted: time to grow up

Three sets of consultants are tripping over themselves to look at Ted Baker’s numbers, writes Kate Burgess. Freshfields Bruckhaus Deringer and a firm of accountants are probing a stock overstatement of up to £25m. And now AlixPartners is reviewing ways to make the fashion retailer more efficient. All three are working on different facets of the same problem: how to sell and value togs in a discounting world. It has been the common theme in Ted’s three profits warnings this year.

Counting shirts and costs is the dull end of catwalk retailing. No wonder Ray Kelvin, Ted Baker’s controlling spirit from 1988 until this year, left the job of totting up clobber on shelves to lesser beings. But discounting is the norm now, Ted is 31 and the business needs systems to match its maturity. Mr Kelvin quit in March over allegations of unwanted hugging, which has left Ted facing an existential crisis. Superdry’s investors hope to solve a similar leadership issue by reinstating co-founder Julian Dunkerton as chief. Ted Baker’s backers do not have that option unless Mr Kelvin, still owner of a third of the business, buys Ted from them. Instead, new boss Lindsay Page, an accountant by training, has turned to outsiders for help in cleaning out Ted’s closet.

In earlier times, fashion brands protected profits by increasing prices, which shoppers would wear for the sake of a logo. Now, they must protect margins by ensuring the mechanics of retailing — such as supply chain and store costs — whirr more efficiently.

Glencore: getting ready

Glencore’s Ivan Glasenberg, December 3: “As soon as [new] guys are ready to take over, I’ll be ready to step aside.”
Serious Fraud Office, December 5: “Glencore has been notified today that the SFO has opened an investigation into suspicions of bribery.”

With the miner’s shares falling to a three-year low, might he need to be ready sooner?

matthew.vincent@ft.com

Ted Baker: kate.burgess@ft.com

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