Undesirable echoes of Rock reporting

Jun 4 2008 by Andrew Hebden, The Journal

PERHAPS I’m just a paranoid Northerner, but I couldn’t help feeling that the television coverage of the Bradford & Bingley profits warning this week had undesirable echoes of the patronising style of reporting which was so prominent during the Northern Rock crisis.

It was typified in a report on the BBC Ten O’Clock News by business editor Robert Peston which began with a clip from an advert from the late 1970s featuring Mr Bradford and Mr Bingley. The theme was that the B&B was a really safe place to save your money, a good old-fashioned prudent lender from Yorkshire (where they know how to look after their cash).

“Perhaps they should have stuck to that model” it suggested, as it went on to criticise the B&B for becoming the market leader in the buy-to-let mortgage market. I was half expecting the report to finish with a clip from that old Warburtons advert set against the backdrop of a Pennine mill town. “Why don’t you Northerners just stick to what you’re good at,” I was expecting Mr Peston to ask.

I should, at this stage, probably declare an interest. During my time as a journalist in Bradford I enjoyed an excellent relationship with Steven Crawshaw, the B&B chief executive whose immediate departure was announced on Sunday. Heart problems were cited as the reason for his abrupt exit but it followed a concerted campaign for his head after he initially denied that the bank was going to have to make a rights issue, then performed an about-turn and did just that.

There’s no doubt that Mr Crawshaw handled this situation badly. It is a shame, however, that it led to the demise of a man who had turned around the B&B during a difficult restructuring period and helped take the bank, which was drifting helplessly before his appointment, back to its Yorkshire roots.

He is now been mocked for leaving the B&B so heavily dependent on the vulnerable buy-to-let market, but it is not long since investors could not get enough of him as the company’s share price soared to a high of 534p in early 2006. By simplifying the bank’s business model through a fire-sale of assets such as its sprawling estate agency business he arguably protected the company from an even worse plight in the current downturn.

The B&B has been a sitting duck in the current climate for some time. But it is not terminally wounded, as Texas Pacific Group’s decision to take a 23% stake in the business demonstrates. Likewise, RBS – which also suffered at the hands of the London media who criticised the fact the board was dominated by Scots – will ride through the storm.

The fact that these two banks, plus Northern Rock, are based in the North has, of course, nothing to do with the problems they face today.

It will be interesting to see how Mr Peston and his colleagues treat the stories of the problems encountered by some of the London-based institutions which will inevitably follow.