A SCOTTISH entrepreneur who built a successful printing business over several decades before exiting in a multi-million pound sale has launched a stinging attack on the UK’s major banks.
John Watson, who spent his entire career with his family’s historic firm before its sale to US giant Multi-Color Corporation (MCC) in 2014, compared the swingeing branch closures instigated by the banks since the financial crash to the savage cuts to the UK rail network following the Beeching report of the 1960s.
Branding moves to axe hundreds of branches as “out of control”, Mr Watson claimed a “lingering toxicity” hangs over the banks, declaring moves to shut hundreds of branches have “appalled” the public. And he hit out at the lack of support banks are providing to up and coming entrepreneurs in Scotland, saying an unwillingness to back new businesses means it is now difficult for anyone to build a company of genuine scale.
Scott Wright: Veteran’s views on lenders should be heeded
Mr Watson turned fire on the banks in a Glasgow Chamber of Commerce lecture last night. The talk was given at The Glasgow Academy’s Watson Auditorium, named after the entrepreneur’s family.
Speaking ahead of the lecture, Mr Watson said the decision by the banks to close branches in such huge numbers overlooks how critical the service they provide is to customers, notably those aged “north of 50”.
While banks claim their digital services are making life easier for customers, he said older people would still prefer to have a branch on their doorstep. “It’s not a lot better for me, I’ll be 70 next year,” Mr Watson said. “Guys north of 50, I would think, like to have a branch, and they are now being denied that. Yet the salary juggernaut just keeps rolling on. They are not in any way going to be inconvenienced.”
Mr Watson believes consumers have been disconnected from the banking system in the pursuit of digital services. And he claims the savings banks have made by shutting branches is allowing them to keep paying vast salaries to executives.
Mr Watson first voiced his concerns about the banks in 2008, after his company was refused a loan by Royal Bank of Scotland to fund a state of the art printing press – despite John Watson & Co’s long track record of success. The bank’s decision was put down to the decline of the printing industry, but Mr Watson said it overlooked the fact that his company earned the lion’s share of his revenue from the rapidly growing Scotch whisky industry.
Scott Wright: Veteran’s views on lenders should be heeded
Having been one of Royal Bank’s oldest business customers, he switched to Clydesdale Bank, which provided the funding it needed for growth and investment. Accounts for MCC show that it paid $21.6 million (£15m) to take over his Glasgow-based business in 2014.
“I don’t think they’ve really got their act together, the banks,” he said. “I was probably the first person to go public saying, ‘have the banks really got the money?’ Because I couldn’t really believe I was knocked back for the money.
“It was difficult then to raise money – what must it be like for the next generation of entrepreneurs coming forward? The hoops you have got to go through now are unbelievable, yet at the same time these big wigs in the banks are taking huge salaries. You’re talking £2m, £3m salaries, or total emoluments in that order.
“If I had been the government I’d have said look, there is no way total emoluments for a banker can be in excess of £1m, if a government is going to invest in that bank.”
Despite his latter frustrations with the banks, Mr Watson said he had a “fantastic career” spanning nearly five decades in the industry.
Scott Wright: Veteran’s views on lenders should be heeded
Now the businessman is devoting his time to philanthropic work, having set up The Watson Foundation to give money to a variety of causes. These include the Marie Curie Hospice in Glasgow’s Springburn, Clyde steamer the Queen Mary and Social Bite, the charity set up to tackle homelessness.
“If you have been fortunate to have been successful in your business life, you almost have a duty of care to those that are coming up behind you to see if you can assist in whatever way,” Mr Watson said. “I must say I’m enjoying it – it’s good for the soul.”
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