Bernard Ginns: Today’s bank managers should heed principles of past

It was home to Beckett’s Bank, a regional lender established by a family of wealthy Victorians.

As well as banking, the Becketts’ sphere of influence extended into politics and public life.

Notable members include a past chairman of the Yorkshire Post, a confidant of Winston Churchill, the future wife of Prime Minister Anthony Eden and, for good measure, an eccentric playboy who was thrown out of the bank for being a liability.

Their financial institution was at the heart of the Yorkshire economy and during the mid-to-late 19th century it was flourishing.

Around that time, a businessman paid a visit to the bank. He was a fairly well-to-do sort, but he also had the care-worn look of a man under some pressure. He arrived for an appointment with his manager and gazed around the vast banking hall of Beckett’s Bank. As a symbol of world-beating wealth and confidence it was hard to match.

Arches soared over the marbled floor and a carved mahogany counter ran the full width of the building. On the wall to the left was a life-sized portrait of William Beckett, a key figure in the development of the bank and a former chairman of this newspaper.

The businessman walked through the hall to the manager’s office, an enormous room in the corner of the building.

Behind the giant mahogany desk sat the bank manager, in those days one of the most powerful people in the city, sitting at the nexus of finance and industry.

The businessman was shown to a seat. He looked concerned. He explained his situation. The bank manager asked a couple of questions and seemed satisfied. He gave his answer and the businessman went on his way, cheered by the outcome.

The bank manager recorded the meeting in his loan ledger. It said: “JT came to see me today. He wanted to borrow for a new vat at his brewery in Hunslet. He was worried about it. I said ‘we are your bankers’ and made the loan.”

The businessman took the money and invested it in his business. His name was Joshua Tetley and his brewery became one of the best-known in the world.

This is a true story, the essence of which was relayed to me last week by Robin Smith, the chairman of Leeds Building Society.

His father was a branch manager at Westminster Bank, which had taken over Beckett’s Bank in the 1920s. The Park Row building, now demolished, became known as Beckett’s branch.

Tom Smith, who managed the branch in the late 1950s, had seen the old loan ledger. It made an impression on him because it encapsulated the principles of good banking.

His son relayed those principles: “The person to whom you are thinking of lending money must be capable of satisfying these three points.

“Is he honest? Does he know his trade? Will he work hard?

“If you get a positive reply to all three, you should lend.”

Sometimes difficulties would arise, even if you followed the principles, Tom Smith said. But, he insisted, if the debtor is a committed and a hard-working person, he can recover the position.

“Security in those days was not of the essence,” Robin Smith told me. “It was not at the heart of the lending decision.”

Lending today seems to be based on an entirely different set of principles, according to Mr Smith.

He said: “Decisions are taken remotely by reference to national lending criteria which are driven by a bank’s need to repair its balance sheet or improve its share price.

“You lose the immediacy of contact. That harms the local economy and harms the national economy.”

The local bank manager used to be part of the fabric of business life.

“He was connected through the bank structure to the national and international trends; he was someone of considerable influence,” said Mr Smith.

Would a modern-day Joshua Tetley find a kindly ear?