New Governor underlines his belief in Bank of Scotland as an independent player Grant's first campaign

Speaking minutes after he succeeded Sir Bruce Pattullo at the conclusion of Bank of Scotland's annual meeting in Edinburgh,

Sir Alistair said: ''I think it is of general interest that, during the period we see ahead of us in

Scotland, that Scotland's leading financial institution and an important consumer business should be . . . directed from Scotland''.

He added: ''It would be a very poor (outcome) if anything happened which disturbed the way in which the bank is able to conduct its affairs as a Scottish business.''

Sir Alistair said he had supported ''to the hilt'' Sir Bruce's very public warnings about the potential dangers of a Scottish Parliament with tax-raising powers, in the run-up to last September's devolution

referendum.

But Sir Alistair, like his predecessor, has now bowed, at least publicly, to the will of the people.

''We are among Scotland's biggest companies so, in a devolved Scotland, we have a role as big business in understanding how the new assembly will work and how the new executive will work and working productively with them.''

Sir Alistair, who played a key role in building up supermarket group Argyll (now Safeway), said he would be taking a ''keen interest'' in customer service and in the development of new products and delivery channels because of his background in consumer

businesses.

In spite of the takeover speculation sweeping through the UK banking sector, most recently pertaining to a merger between Halifax and Royal Bank of Scotland, Sir Alistair is confident that Bank of Scotland can retain its independence.

The bank was left open to a hostile bid two years ago, when Edinburgh-based Standard Life decided to sell the vast bulk of its 32.2% stake, but no predator emerged.

Commenting on the state of affairs now, Sir Alistair said: ''There is a conviction among the bank team that the bank already has the scale to continue as an independent unit.

''Both the track record and the confidence we have about the momentum that is within the bank convince us that it is within the shareholders' interests that they continue to see an independent Bank of Scotland.''

Touching on his relationship with Peter Burt, who was handed the chief executive part of Sir Bruce's role in 1996, Sir Alistair said he had served on the bank's board for six years and saw him as a ''close personal friend''. Emphasising his understanding of the distinction between the roles of part-time Governor and chief executive, Sir Alistair, who is also chairman of brewer Scottish & Newcastle, said: ''I don't want to present myself as arriving with a big, strong managerial agenda.''

Earlier, Sir Bruce had given shareholders a positive update on current trading: ''The board has now reviewed the group's trading results for the first two months and we believe that the outcome is in line with the confidence I expressed when we released our preliminary (annual results) statement to the Stock Exchange on April 22.''

Sir Alistair cited his belief to shareholders that, when the history of the bank was next written, Sir Bruce's ''tenure of office . . . will be identified as the most important and most productive epoch to date in the history of the bank.''

Sir Bruce, who looked somewhat embarrassed by the glowing tribute paid to him by Sir Alistair, bowed out in typically low-key style.

''I would like to say what an enormous privilege is has been to serve as Governor of Bank of Scotland for the last seven years and as chief executive for some 12 years before that,'' said Sir Bruce.

Bank of Scotland shares yesterday added 14.5p to 708.5p, in a generally positive sector.