Reprinted from December 6 2015

BUSINESS 6

MURDOMACLEOD Turnaround whizz leads Clydesdale to stock market

believes iPadsinrevampedbranchesand Skype calls with marketexperts will help Clydesdaletocompete with thebig four David Duffyspecialises in reviving ailing banks. lenders—HSBC, Barclays, RBS andLloyds. “Wecan takeonthe bigger banks,”he says He put Ireland’s AIB back on the path to profit, confidently. “We don’t need to be as bigas them,we just need to be better.” and now has to persuade investors that his He is alreadyrevamping thebrand,a processthathas seen him travelling to Glasgow-based lender canstand on its own feet Leeds, Preston, Dundeeand Aberdeento conduct spot checks on staff. “I do alittle test whereIsee just howmanyofthe cus- avid Duffy pops his head around from NAB will involvehanding 75% of tomers abranchmanager knowsbyname. a tall wooden door.The new Clydesdalesharestoinvestors in theAus- It tendstobealot,” he says. chiefexecutive of Clydesdale tralian bankand attracting enough sup- Duffy’s peers areclearly impressed. Bank givesamischievouslook port for the 25% free float. However, fears Jayne-AnneGadhia, chief executive of as he spiesthe feast of burgers, are mounting that Clydesdalemay not fellowchallenger VirginMoney,sayshe has fish andchips andacheese make it to thepublicmarketwithsomany alot of vision.“He’s taken on abig turn- board. “You’ve enoughtofeedan army,” conduct issues and potential fines hanging around andthe conduct risk still looks Dthe Irishmansayswitharaspychuckle. over it.There is also achanceitwillbe enormous,”shesays.“Buthavingsaidthat, We aremeetinginagildedground-floor bought out.Sabadell, the Spanish lender I think thefloat will get doneand I suspect room in the bank’s Venetian renaissance- whichbought TSB in July,is rumouredto he will be abig playerinthe years ahead.” style headquartersinGlasgow.The Duffyisaware of thepressureof turning 54-year-old former GoldmanSachs around Clydesdale.The bankis still strug- banker greets me with awarmhandshake gling under mammoth conductcharges and begins unwrapping thebrieand that forced itsparenttoprovide a £1.7bn stilton,arare treatforaglobetrotting provision for mis-selling. Butthe former banker whohas to limit his calorie intake. GoldmanSachs head of humanresources, “I tend to eat fish in theevenings andhave who also workedinseniorroles at Dutch one glassofredwine.IfIeat bigmealsI’llbe lender INGand South Africa’s Standard theMichelinman.” Bank, rarely backsawayfromachallenge. Frequent travel is nowpartofDuffy’s He took thereinsofAlliedIrishBanks(AIB) routine. The former head of Allied Irish in late 2011 at a timewhenIreland was still Banks —Ireland’s largest state-owned reeling from the financialcrisis. lender —has just returnedfromawhirl- He was first tapped on theshoulderto windtriptoLondonwhere he tried to takethe AIB chief executive’s jobbyPeter drum up support for Clydesdale’s long- Sutherland —aformer Irish attorney- awaitedstock market listing. Zigzagging general anduntil June the long-time across the citybyTubewitharucksack on chairman of GoldmanSachs International. hisback,hemetTracey McDermott, acting ButDuffy had misgivings about returning chiefexecutive of theCity’s financial to acountry he had beensodesperate to watchdog, rating agencies, investment leave after college. banks andinvestors.The plan is to launch a AIMEE DONNELLAN “I wasliving the high lifein Singapore. £2.5bnstock market floatbythe end of My mornings consisted of a swim in an next month. INTERVIEW Olympic poolin80degrees heat —but Ifelt “Weare going to be independent for the I had to go back to help. After all, Ireland is first time since 1920,” says Duffy. Whilea my spiritual home,” he says. famousname, Clydesdalehas beenowned He movedbackto Dublin and immedi- by bigger banks for nearly 100 years. ately began a painful clean-up operation at “We’ve struggledwithalack of directionin AIB. This involved rounds of joband pen- recent years. Theownersweregoing to sell be looking for another targetand Clydes- sion cuts andachangeofleadership. He andthentheyweren’t. It all just created dale is topofits list. Duffy is quick to quash was alsounder constantscrutinyfromthe confusion. Now we have aclear plan.” those rumours. Irishpress, whoregularly highlighted his Dressed in adarknavy suit, crisp white “We can’t buildabusiness on uncer- €500,000(£360,000)salaryandhisGeor- shirt andred patternedtie, Duffy hasthe tainties,” he says. “A takeoverisreally just gian mansion in West Cork. Determined: David Duffy has to overcomeinvestors’fears about fines for bank misconduct and rumours that it maybe taken over lookofayoungerJohnMcDonnell.Likethe abrightshiny thingthatneedsto beput out “I couldhave beenthe Pope andIwould shadowchancellor,acrop of silver hair of ourview. If we manage to buildabusi- have had the samereception.Peoplewere frames his lined face andapair of reading ness where customers arehappy,we can upset,legitimatelyso.Therehadbeenhuge informalapproach—sitting eating a sand- sures and will that affect my region?’ Then He traces this relentless ambition to his glasses perchprecariouslyon his head.He then make the best choice for theshare- damage donetothe country. Youhad to wich withstaffat7o’clock atnight —didn’t I’dreply yes, but letmeexplain howwe’ll parents. Duffywas born in Hammersmith speaks in a soft,transatlanticaccentwith holder.Thatcould see Clydesdaleasthe accept that youweren’t going to be treated stoppeople beingtooafraidtochallenge the do that.Itried to draw out the anger.” in London but his familymoved to West hints of his West Cork upbringing. consolidator.But if thereisabuyerand we any better because youweren’t thecause big boss. He was forcedtovoice theirfears At firstthe staff were blunt, angry and Cork in theearly 1960s when Ireland’s Theveteranbankerisbeginninghisnext have areally strongteam, they will have to of theproblem,” he says. himself, saying out loud thequestions he unable to hide their disappointment.But economywas farfrom booming. His bigadventure in Glasgow.Having been payahell of apremium to getinthe door.” He attempted to discourage dissent in thoughttheyweretoo afraidto ask. “I’d oncehereturned for the second and third mother andfatherdid anyjob that gave luredto Scotland’s largest citywitha Fornow,heisattempting to bring a the AIB ranksbyregularly showing up at sitthere andsay,‘how will you support time, he could see his message washaving them acomfortable life. This meant Duffy £500,000 signing-on bonusand salary of bank foundedin1838 into the21st century. branches to hear from worriedemployees. regionswhere people are struggling with an impact. and his siblings had to takeonpart-time about £1.3m, shareholdersare hoping he He is obsessedwithnew technology and However, he quickly realised that his too much debt? Will therebebranchclo- His most dramatic act came six months jobs. “It wasreallytough but youjust got canturnroundthefortunesofalender long into hiscontractwhenhedefiedthe Irish on.Irememberworking nights, Christmas viewed as aproblemchild. government’s call for mortgagerates to be daysandholidays.Isupposethat’swhy I’m Clydesdaleisone of three large Scottish cut. He closed 67 branches andincreased always looking for thenextchallenge.” banksalongside RBSandBankofScotland. interestratesinthesameday.“Thegovern- His most vividchildhood memoryisof It providesretail, commercialand private ment allowed us to do that andwas very his mother sittingintheir home in rural bank services to nearly 3m customers supportive. It’s atestament to the strength Cork spreading butteroverhundredsof spread across Britain through 320 bran- The lifeofDavid Duffy of therelationshipthatwewere allowed to slicesofwhitebread. “She’dpile themhigh ches. It is one of only 10 commercial banks make those choices,” he says. on atrayand then getthe busintoCorkand in theworld that is authorised to printand VITALSTATISTICS WORKING DAY By the timeheleftAIB,the bank had knockondoors of small businesses to sell issue bank notes. Born: September 30,1961 David Duffy’s alarm clock goes offat6am.The first task of the madeitsfirstprofitsincethecrisis.Itisnow sandwiches. Therewas alot of disciplinein Despitegliding through the financial Family status: separated, with dayfor the Clydesdale Bank chiefexecutiveisoften a 5km run preparing forits ownstock market listing that.She eventuallyopenedupalittleshop crisis, itsfuturehas beenrepeatedly cast two daughters and one son in Glasgow’sKelvingrovePark. next year that will allow it to repaythe whichmeant even morebread had to be into doubt. National Australia Bank (NAB), School: TerenureCollege, He picks up breakfast and coffee on the wayinto work, €21bnitborrowedfromthe Irish taxpayer. butteredinthe mornings,” he says. itsowner since 1987, hasmadenosecretof Dublin usually arriving at about7am.Meetings begin at 8am. Each Duffy, however, has beencriticised for Butthe familywas no Norman Rockwell itsdesiretosell.Clydesdale,withYorkshire University: University College week he has one dayoftravellingand twodinners to attend. dodging thefinal hurdle. painting.Afterhisparents’marriage broke as its second biggest brand, is still strug- Dublin and Trinity College Duffy drives home at 7pm or 8pm and has dinner before He argues that it was simply his timeto down, Duffy wassenttolivewithhis aunt gling with the cost of writing off badloans First job: in a24-hour shop watching boxsetsofseries such as Sons of Anarchy and leave. “I know what I’mgoodat,” he says. anduncle,whomhenow calls mumand andpaying compensation to customers in Rathmines, Dublin Breaking Bad. “I don’t knowif I’m sane afterwatching an “I likebuilding teams andbusinesses, dad.Theyoccupyhalfofhis vast West Cork whoweremis-sold products. Pay: £1.35m episode of Breaking Bad. Icertainly won’t look at aBunsen loadsofadrenalineand excitement,and retreat. Thefamilycomplications do not “Weare asking people for money, Car: Range Rover burner the same way again,” he says. AIB wascertainlythat. ButIhad three end there. He is nowinthe middle of set- so we have to perform,” says Duffy. “If we Homes: Glasgow, Dublin, Cork capable chiefexecutivesand ifIhad stayed tingupanew lifewith hispartner,acollege getthe service to the customer right, Favourite film: Cool Hand DOWNTIME they wouldhaveleft. Iwould also have girlfriend with whom he rekindled a everything else will fallinto place.” Luke At theweekend, Duffy enjoys cycling and sailing. “I like the become boredthree years in.” romance after hisown marriage ended. Therehavebeenseveral half-hearted Book: TheGreat Gatsby distraction. Both of those things work forme and Ido them Iaskifhe getsboredeasily.Hepausesfor She will move to Glasgow next month. attempts to sell Clydesdale, but theprice Music: LedZeppelin listening to music,” he says. asecond, laughsand says yes. Imakethe Duffy takes it all in his stride.Hesayshe asked wastoo high. NABand Duffy are Gadget: iPhone “I went sailing with my partner and our respective kids last pointthatwhile it might be exciting to isnowfocusedon winning back customers hoping that by providing £1.7bnofindem- Last holiday: sailing around summer.Gliding along on the open oceanis the ultimate rebuildabusiness that hascrumbled, the by showing howthe bank is changing. nity against future fines, the bank will be the Greek islands Favourite: Paul Newman therapy.” He has been known to take part in charity runs hard work surelycomes from keeping it “People still need convincing. There’s alot able to attract willinginvestors. Charity: Shelter starsinCoolHandLuke dressed as awoman. together.He agrees, butknows that he is of talk about look howgreat we are. I’m Theprocess of separating Clydesdale thewrong mantosteer asteady ship. moreinclinedtosay,lookwhatwedid.”

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