People's bank won't fly says departing banker

By RICHARD BRADDELL

The people's bank promoted by Deputy Prime Minister Jim Anderton will be welcomed by some banks as a chance to get rid of loss-making customers, says the Bank of New Zealand's outgoing managing director, Mike Pratt.

Mr Pratt finishes up today before returning to Melbourne to take charge of the Australian operation of the BNZ parent, National Australia Bank (NAB).

In a parting interview, he said the people's bank would be unlikely to survive because it would not make a profit.

Nevertheless, the mainstream banks had a responsibility to provide banking to all customer groups, and the BNZ's approach was to do so by developing low-cost products and distribution channels.

At NAB, Mr Pratt will replace Gordon Wheaton, who in a management shakeout has been dropped from the group leadership committee.

Forty-six-year-old Mr Pratt won respect during his two years in New Zealand for addressing poor staff morale and improving the bank's equally poor standing in the minds of customers.

It has climbed into the middle ground above low-ranked ANZ and WestpacTrust, and while it still has territory to make up on ASB and National, Mr Pratt says BNZ is the only bank improving its customer satisfaction ratings.

His arrival in New Zealand two years ago was accompanied by the move of head office from Wellington to Auckland, a shift that saw the previously scattered executive team concentrated within shouting distance on the same floor in the new Queen St headquarters.

In a six-month mission of fact-finding and meeting staff and customers, he spent 50 per cent of his time out of the office.

His strategy was stated in a news release soon after he began: "I believe strongly that the two key inputs in banking and the broader financial services arena are people and technology."

The bank's subsequent transition from a technology follower to a leader would seemingly justify the elevation of the former head of NAB's human resources to managing director.

The hugely successful Global Plus credit card has become the model for co-branding and loyalty programmes. And the introduction of internet banking has attracted 13,000 customers since its November launch, while the BNZ recently beat technology-savvy ASB to online share trading by a few hours. Trading in Australian shares is imminent.

The bank also claims leadership in the business market, helped by innovations such as online foreign exchange trading.

But for the NAB, Mr Pratt's most important achievement would be the profit of $358 million in 1999, a record for any New Zealand bank and a result that makes BNZ one of NAB's most profitable operations.

Not everything has gone smoothly. An outbreak of industrial action in November produced the bitter claim from the FinSec Union that the bank was treating staff like "sweated labour" and was setting unreasonable targets.

Mr Pratt does not agree. Only a few staff took part in the strike, he said, and 400 FinSec members chose to leave their union as a result.

Mr Pratt is succeeded by the head of business financial services, Peter Thodey, the first New Zealander to head the bank since NAB took it over in 1992.

It will be a seamless transition, with Mr Thodey promising more of the same. "Mike has been exceptionally visible out there and the level of trust has grown enormously. The frontline really do trust senior management much more than three years ago."