Smaller, less ambitious and less profitable – those aren’t goals many managers would choose to set for their business.
But coming from the mouth of Steve Pateman, head of banking at Santander UK, that’s exactly what we want to hear.
Banks should take pride in providing a solid, reliable and boring service.
That’s what they used to be known for. We respected them for it. And if they’d stuck to what they were good at, the economic mess we find ourselves in today may never have happened.
There will always be a place for speculation in the banking industry. Any kind of investment is a bit of a risk.
But it was when established high street banks got into the business of taking major risks in the hope of chasing major profits that our troubles began.
Some, such as Northern Rock, began lending to all and sundry, motivated by a desire to grow their businesses as swiftly as possible. They assumed that ever-rising house prices would ensure they got their money back even if loans were defaulted on.
Others engaged in casino banking, sometimes by buying up debts (directly or indirectly) from US lenders who had behaved rather like Northern Rock. But they were not meant to be risk-takers, playing the market like big investment banks. These were high street names which we looked to for stability and constancy.
So Mr Pateman’s prediction that banks and their shareholders will have to get used to lower returns and less ambitious rates of growth comes as a breath of fresh air.
He is also saying exactly what needs to be said in order to restore confidence in the banking sector.