First Direct in a strong position in fragile times

THE head of HSBC's Yorkshire-based internet and telephone bank warned that Britain faced more economic woes as he paid tribute to the work of Michael Geoghegan, who is to leave after a boardroom shake-up.

Matt Colebrook, chief executive of Leeds-based First Direct, insisted his organisation had come through the financial crisis "very strong" and said it would do more to tap into emerging mobile-phone technology.

The Leeds-based lender, 21 years old this autumn, employs 2,650 at Stourton and grew its market by 42 per cent last year despite the poor economic conditions.

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"Clearly, the economy remains fragile. We have seen some subtle changes in behaviour. People have reduced their income and outgoings and made some sensible decisions. I think we are going to remain fragile for some time – until confidence grows. I think people will look back at this time with some caution and some learning."

Mr Colebrook, a HSBC veteran who joined the bank when he was 17, also defended Mr Geoghegan, who last month announced he would step down as chief executive, denying reports he had threatened to quit if he could not become chairman.

Stephen Green, who holds that post, is leaving to become Trade Minister in January.

"Michael Geoghegan and Stephen Green are still very much involved. Stephen Green was at First Direct in the summer as part of his responsibilities as chairman. We had an outstanding day. He is well known to the business and well known to the UK. He was highly engaged and delighted to see the strength of our business."

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Mr Colebrook paid tribute to the "agilty and professionalism with which they have negotiated our business through one of the most turbulent times in our history".

He added: "The strength of senior leadership team has placed us in a strong position going forward."

He said First Direct is recruiting but there was no "immediate need" to increase staff numbers significantly. It does, however, want to make advances in the way it does its business.

"There will be some acceleration in technology, particularly in the mobile space – the adaption of mobile as a further channel with us (although) I don't see mobile taking over or becoming the predominant channel.

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"We will continue to have the customer at the heart of what we do."

HSBC didn't require a taxpayer bailout but Mr Colebrook said the image of the industry as a whole would take time to recover from the financial services meltdown.

"There is no doubt that trust has been eroded in the present crisis. Those financial services providers that put the customer at the heart

of everything they do will regain the trust quickly. The trust has to be there throughout a lifetime."

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In August, HSBC reported half-year profits had more than doubled.

It beat earnings forecasts after bad debts on personal and corporate loans fell sharply, more than offsetting slowing investment banking growth.

Half-year profits for HSBC hit 7bn, or a 34 per cent rise to 6.3bn, on an underlying basis, with First Direct increasing its presence in the mortgage market and hoping to grow this further.

Mr Colebrook said: "Our business model has proved very resilient. Because our relationship is so strong our customers are allowing us a strong emotional connection with them. There are customers coming to us overall, for example, in mortgages and credit cards."

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First Direct is on course to vastly increase its charity work this year.

Having raised 46,000 for the NSPCC in 2008, staff were inspired to step up their efforts.

Last year, it generated 440,000 through a mixture of fund-raising and pro bono work and it has committed to raising 2.1m though similar methods in 2010.

The lender has also funded the training of 21 NSPCC counsellors, to mark 21 years in business.

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Mr Colebrook hailed its work with the charity as an "amazing achievement" and said the campaign had engaged staff at all levels of

the business.

MATT COLEBROOK

Matt Colebrook took over as chief executive after the departure of Chris Pilling, who took up another role at parent company HSBC.

Mr Colebrook, from the Isle of Wight, has spent 24 years at HSBC and was previously a senior executive supporting the UK bank's then chief executive, Dyfrig John.

He said his attitude had been defined by time spent working the counter at the start of his career.

"So much of that has shaped my life and who I am. I am a banker from day one and I still remember that. From day one of my career it has been about people."