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View from City Road: Kleinwort has a size problem

Wednesday 22 December 1993 19:02 EST
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Ever since Kleinwort Benson ousted its last chief executive, Jonathan Agnew, six months ago it has been plain as a pikestaff that the bank would be better off abandoning its search for a replacement and sticking with the double act of Lord Rockley and Simon Robertson at the top.

Yesterday Kleinwort rightly did just that. Lord Rockley as group executive chairman and Mr Robertson as deputy chairman will steer the bank, supported by a triumvirate of divisional managers. Colin Maltby remains as chief executive of investment management, while Sir Nicholas Redmayne and David Clementi have been appointed joint chief executives of investment banking.

Such a devolved team structure makes sense in investment banking. Warburgs is an example.

Any chief executive from outside would have had to contend with Kleinwort's blue-blooded culture while trying to heal the wounds caused by the warfare between securities and corporate finance. This arrangement avoids that problem and allows Lord Rockley and Mr Robertson to concentrate on their priority - rebuilding Kleinwort's customer relationships.

The biggest obstacle facing Kleinwort in the medium to long term is its relatively small size and capital in comparison with other integrated houses, especially the Americans. Kleinwort has won top-class international appointments, such as the privatisation of Italian electricity, but it is uncomfortably perched, neither a big hitter nor a niche player.

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