RAYMOND Abbott confesses he became a spreadsheet junky after being persuaded to embark on a career in accountancy on the basis of what proved to be a misleading prospectus.
“I had no idea what career I wanted, my mum and dad were from a very working class background,” he says noting the impact of a school careers talk in which he was assured chartered accountants could change their cars anually.
Forty-something years later Mr Abbott has not found the car perk to be as glittering as he expected. He has had his latest motor, a Volvo XC60, for a year already and kept the previous one for four.
“It was a lie to entice poor mere mortals like me into being a CA,” he says of the work tip with a laugh.
But the career choice has allowed the sports lover to enjoy rewards that he could not have imagined.
One includes being able to indulge an interest in American football that he has pursued on regular trips to the USA over the years.
Mr Abbott is looking forward to watching the team he supports, the San Francisco 49ers, take on the Arizona Cardinals in their home stadium in California next month.
Closer to home he has been a regular at Hibernian FC games since boyhood.
The focus of his working life is very much on Scotland these days.
The Edinburgh university graduate became chairman of the venerable Scottish Building Society in July 2017 after four years on the board.
The job involves playing a key role in the mutual’s efforts to respond to the challenges it faces at a time of upheaval in the mortgage and savings markets it focuses on.
The society has spent years battling against the giants that dominate the retail banking world. It now faces competition from a growing number of new entrants, which are taking advantage of financial technology to run lean operations without legacy issues to deal with.
But Mr Abbott is confident the building society has a part to play in the modern financial services market after spending 170 years providing mortgages for the people of Scotland, almost exclusively, and offering a safe home for their savings.
He notes the society takes a personal approach which is valued in an age in which decision-making is increasingly automated.
“We’re not a high street bank doing computer scoring on your mortgage applications, we actually take an individual approach to all our credit assessments.
“We will take a look at your history, look at your track record. You will deal with real people. I know that’s how banks used to be but it’s not how they’ve been in recent times.”
Mr Abbott says the society rewards loyalty through the rates it pays on savings.
It has around 33,000 members, split roughly 80:20 between savers and borrowers.Numbers have been holding up.
Ten years after the global financial crisis left giants such as RBS needing massive bail- outs Mr Abbott appears pleased SBS has retained a strong balance sheet. He notes: “We’ve got lots of capital, lots of liquidity and we look forward.”
The society will stay true to traditions, including some that sceptics may think are outdated, because they are valued by members. Many of these grew up in an age of manual record-keeping.
“Most members have pass books. They have a different style from your Millennials, who want to be on the phone or online.”
While the likes of RBS have been closing branches across Scotland the society has no plans to close any of the six it operates, from Inverness to Galashiels.
Asked what branches are for in the online age, Mr Abbott appears to have no doubt they serve a practical purpose as well as helping to promote the brand.
Noting some families have been connected with the society for decades, he says: “In the local community it’s pretty important for those generations of members and new members.
“There are still cheques; there’s still a need for cash; there’s still a need for contact on a mortgage application and that’s what we will continue to do.”
The society gets lots of letters and emails from members saying “please don’t close our branch”.
It has used local agents to help provide services, in a way that has allowed it to keep the branch network at a sustainable size.
“I think the move of other banks away from branches that’s been driven by computerisation and cost reduction. We’ve not had that big cost base of a large network, it’s quite contained and one which through the agency network works quite well for us.”
The society is bucking the trend by moving to raise the profile of its branch network. There are plans to open a branch in Edinburgh city centre. The current Edinburgh branch is in the head office building in the west of the city. Glasgow is in line for something “a bit more flagship”.
The aim is to encourage more people to come into branches, as part of a drive to help ensure the society remains relevant to as many people as possible.
This will also involve providing a different route to come to the society for people who have grown up in the online world.
“We’ve got our first online savings product. We’re planning more online, putting in new systems.”
An app is in the pipeline.
“We’ll probably take a little downturn in profitability in order to invest for the future. This is all about remaining relevant in the Scottish context.”
Mr Abbott says being a mutual gives SBS greater freedom to make decisions that will promote its long term health than a company that may have to focus on short term profits.
Innovative products such as self build mortgages and retirement interest-only plans show the society can carve out attractive niches in what is reckoned to be an increasingly competitive market.
Mr Abbott can remain on the board for another four years – long enough to see the society put in place the infrastructure required to attract Millennials.
He will continue to combine work at SBS with other non-executive positions. The appeal of a portfolio career became apparent in the wake of Mr Abbott leaving Alliance Trust in 2011 after getting caught in the crossfire between the investment firm and shareholders.
Mr Abbott joined Alliance in 2006 after the trust bought the Albany Venture Managers business he helped develop. Alliance wanted to gain exposure to a wider range of assets but changed tack after agitation from investors.
“The trust needed cash and I was asked to effectively close down the private equity piece.”
Mr Abbott notes the funds Albany managed did well but shows no anger at how things turned out.
“It’s a bit of a shame really. Things could have been a bit better but they had to choose their strategy. It was obvious they had to raise cash.”
He made a name for himself as something of a pioneer of investing in early stage technology businesses after moving into private equity in the 1990s with Ivory & Sime, when the Edinburgh firm was a big name in the fund management business.
Work at Ivory & Sime involved trips to the US to monitor a portfolio which included firms that played a pioneering role in the development of the technologies of the internet age.
The enthusiasm for spreadsheets dates from a stint in corporate banking he completed at Bank of Scotland after training as an accountant at Thomson McLintock.
It may come in handy as he tries to help ensure the numbers continue to add up for Scottish Building Society.
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