Banker’s Club

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In the good old days, being the general manager of an international bank’s overseas office really meant something.

Long before the use of ‘chief executive’ or multiple ‘managing directors,’ the GM was King. A simple title, but so much power. He was responsible for everything, from dealing with the authorities, deciding which clients, which industry, which countries, and which products.

If he told Head Office we had to be in Changsha, Hunan province, and to set up the office in a hotel room, then that is what happened. If he recommended granting a US$10-million line of credit to a company with US$100 net worth, then that is what happened.

All the staff knew who was boss and would be so happy if he walked past and said hello to them. They would nervously knock on his door to ask him something or to bring him something and enter with trepidation and excitement. Even Head Office people revered every word the GM uttered, and approvals were given to exceed limits or do something new with just a few words from the GM.

Just like Marlon Brando marooned on his little island with his loyal staff and the occasional boat coming along with a few Head Office people, but no apocalypse here.

The GM was Genghis Khan also, conquering the region as he saw fit and then wheeling in the self-serving hierarchy from Head Office to give the opening ceremony speech before dispatching them back to Head Office before they had too much to say about the running of the Kingdom.

Different banks competed against each other with the Warlord GMs jostling for position, trying to capture the best staff and clients. Then there was the civilized meeting of Warlords at the Bankers Club once a week.

The Lifestyle
GMs lived in big houses and bought furniture from Bali or expensive rosewood cabinets and somehow managed to get it included in the house setup cost. Of course, they needed a huge swimming pool to relax after a hard day ordering or conquering and a roof terrace to invite middle management for ‘compulsory attendance’ parties on weekends.

Food was bought and paid for by the Bank as ‘client entertainment.’ Even the washing-up liquid used to clean the plates after dinner was an expense to claim, as was the cost of the poor amah cleaning the plate.

Drivers were a problem because the wife would always want to use the office car for shopping or afternoon tea with the elite tai tais.

The wife could also own the contracting company that was hired to renovate the Bank’s office. Or she may supply the artwork that was essential to show how well the Bank was doing, and the ownership of that artwork was always difficult to work out, although the Bank had paid for it.

Club memberships were essential for the GM’s family because the family would suffer so much living in those terrible places like Hong Kong or Singapore. Without the club membership, how could anybody survive?

A Korean once told me that upon graduation, they would dream of landing a job at Samsung and buying the big James Bond briefcase to take to work. Everybody wanted that job. In banking, everybody wanted to be the GM of a foreign branch and be King for a while.

The Matrix
Long before Keanu Reeves came along, Head Offices needed a Trojan Horse to curtail the power of their own created Brandos strutting their stuff in the name of the Bank abroad. So how do you do that? Well, you invent something called the matrix system.

You start sending staff to the GMs office and tell them that they report to two people: the GM for local matters and a business line head at Head Office. So, as an example, you send a ship finance expert to Hong Kong and he reports to a ship finance expert in Europe.

The ship finance expert in Europe tells the staff what business and products they must work on, even if the local GM disagrees.

The ship finance expert from Europe, who has never been to Asia (although will use the matrix system as an excuse to, eventually, travel frequently) will tell everybody in Asia what is the best way to do business in Asia. Even if the GM has many years experience in Asia, his view is ignored.

Gradually, the power of the GM is undermined. Although he is still responsible for local matters—like deciding which kind of budget an expat should have for a house or what type of car—gradually, the Head Office business line head starts to dictate to the local GM what is best for his own precious staff.

All the business line heads start doing that and, suddenly, it is total chaos.

Now the GM has no power whatsoever, but he still has that big house. The house is fine, but he has to cut all those expenses for the washing- up liquid, parties, office decorations because, under the new matrix system, these expenses are split per business line, and each business line will scrutinize its allocation very carefully.

In case people suspect the GM has become a puppet, you change his title to ‘chief executive’ but then all the business people who have infiltrated the foreign office under the matrix become ‘managing directors (of their business line). Multiple managing directors everywhere, but not one has ever had boardroom experience.

Then you put in more multiple lines of reporting, vertical and horizontal. So that for multinational clients, there is one bank officer (managing director) who is responsible for the global relationship for his client.

He is based in London, but he knows best what is good for his client’s needs in India.

Then you have the country expert to whom all is referred. He has a connection with his country.

So when the branch of a bank in Hong Kong grants a US$3-million credit line to a local Hong Kong trader with a net worth of US$100, the same branch may not give a credit line of US$3 million to the local subsidiary of an Indian company because the ‘managing director’ for India, who is responsible for Indian clients, does not want to deal with that Indian group for reasons like “I only like the top 10 groups.”

So the Hong Kong branch can only deal with weak local traders but not strong subsidiaries of foreign companies.

Once the power of the GM has been completely undermined by the matrix, it becomes extinct. It was the last bastion of colonialism.

Unfortunately today, we have a fragmented, disjointed banking system that nobody understands.

But, at least, the overhead is down, there are no silly offices in Changsha and only big companies get credit lines.

Old hotels where the banking warlords used to hang out—like The Mandarin and The Peninsula—have been replaced by glass boxes like W Hotel or the plastic Four Seasons.

Out with the old and in with the new. Out with nepotist, expensive GMs who got something done and in with the cheaper, chaotic mess of inexperience and multiple ideas pulling in no direction.

Print ed: 06/13

 

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