The Player: Mervyn Pedelty, Chief Executive, Co-operative Bank: Banking on social ethics produces profits for the Co-op

PERSONAL DETAILS: Aged 50. He lives in Greater Manchester and drives a Mitsubishi Shogun and Mercedes SL. In 1998, he was paid pounds 322,000. Mr Pedelty chairs Sustainability North West and is a director of the North West Business Leadership Team. He is also a trustee of the Symphony Hall in Birmingham and the mental health charity Triumph over Phobia. Other interests include music, art, skiing, countryside and the environment.

CHALLENGE: "The biggest challenge is to continue our very profitable development and growth," says Mr Pedelty. In 1998, the Co- operative Bank increased taxable profits by 34 per cent to pounds 73.6m and its customer base rose by 15 per cent to about 250,000. The UK market for retail financial services is highly competitive with a wave of mergers and new entrants such as the supermarkets. Mr Pedelty says the successful institutions will be those that give outstanding customer service and offer a good range of easy-to-understand, good-value products.

CORPORATE BACKGROUND: Mr Pedelty was appointed chief executive of the Co-operative Bank in October 1997. He had been a partner of The LEK Partnership, the international corporate strategy consultants, where he specialised in advising financial services companies. He also worked at TSB Group as chief executive, commercial operations and was on the TSB Group executive committee.

STRATEGY: The Co-operative Bank is focusing on a small number of significant initiatives. These include further development of its phone and Internet banking services and further widening the availability of its products and services with Co-op retail stores and the wider Co-operative retail movement. The bank also intends to re-enter the residential mortgage market. The bank relaunched its Student Account last year. Mr Pedelty says the group has already demonstrated how successful the Internet is as a banking service channel. The real advantage, he says, is that transactions are far less expensive. The ATM cash machines in 350 Co-op stores have helped to boost the shops' sales and provide a service for small communities that often have no other banking facilities. After a strategic alliance with Post Office Counters, current account holders can pay in or withdraw from accounts in 15,000 post offices in England and Wales. The bank's cash Individual Savings Account (ISA) is available in Co-op stores, one of the few to fulfil the original hope of the Government when ISAs were launched. The bank is also working with Co-op Insurance Services (CIS) to develop cash savings products. The Co-op movement encompasses several big businesses including the retail stores, travel agencies, insurance and telephone banking. "We are a very broad-based family of businesses," says Mr Pedelty. The Co-op Bank is known for its ethical approach to business, introduced in 1992. The policy was reviewed last year to the approval of 91 per cent of customers. This approach is seen as one of the bank's greatest assets in attracting new customers. But Mr Pedelty says it is "just one component of what we are about. It's about recognising that principles matter."

MANAGEMENT STYLE: He describes it as "focused". He takes a strategic view but says two-way communication and openness are vital. "It is very important that I and all the senior executives are approachable." He is keen to get staff views and says if staff are proud of where they work and feel they are being treated well, "that translates into better customer service".

MOST ADMIRES IN BUSINESS: Hilary Cropper, chief executive of FI Group, "a great organisation" says Mr Pedelty. In FI Group he says you see at first hand "that they take responsibility to their staff very seriously. They are not just seen as employees." Mr Pedelty admires people who can develop a business for the long term and make the big bold strategic moves. He names Sir Brian Pitman, chief executive of Lloyds TSB and Lord MacLaurin of Knebworth, ex-chief executive of Tesco.

CITY VERDICT: The Co-operative Bank has won several awards for its products. The Which? independent consumer guide lists Co-op's Tipanet service as one of its Best Buys for sending money abroad. The bank is keen to be as socially responsible as possible. Last year, it won several awards for its Partnership Report, a companion publication to the Bank's Report and Accounts, which covers the seven stakeholders the bank has identified as partners in its business.