Business

Virgin Money boss criticises 'alpha male' banking

Jayne-Anne Gadhia

Virgin Money's chief executive has hit out at the "alpha maleness" that has run through banking.

"Winning at all costs" has long been a problem in banking, Jayne-Anne Gadhia told Radio 4's Today programme.

"[Ruthlessness in banking] has led to so much loss, so much brokenness in our banking system," she said.

Ms Gadhia's comments follow the governor of the Bank of England's attack on ethics in the City of London in his annual Mansion House speech.

Speaking on Wednesday night, the governor, Mark Carney, said: "The age of irresponsibility is over."

He also called for longer prison sentences for bankers who break the law.

'Good business'

Ms Gadhia has headed Virgin Money, the UK challenger bank part-owned by entrepreneur Sir Richard Branson, since 2007.

"Being able to look at a more balanced way of assessing performance is very, very important," she said.

"I don't know that ruthless is right. We want to make everyone better off.

"[Being ruthless] is not illegal but I absolutely believe that good business, which tries to find a win-win for everyone, is going to be the most successful business in the end."

As the female boss of a High Street bank, Ms Gadhia's speaking out about "alpha males" could be seen as part of a wider strategy by the Virgin Group, which has recently implemented more family-friendly workplace policies.

On Tuesday, Sir Richard revealed that new fathers working for Virgin Management in London and Geneva will be given up to a year's paternity leave on full salary.

And last year, he announced that his personal staff of 170 could take unlimited holiday, to "take off whenever they want for as long as they want".

RBS sale 'success'

Ms Gadhia previously worked at Royal Bank of Scotland under Fred Goodwin from 2001 to 2006.

Towards the end of her time there, she became uncomfortable with the pressure she was coming under to package up subprime mortgages as investments and to drive profitability in the mortgage market, which she couldn't see a way to do.

She referred to "doing things that I didn't feel that I could deliver with complete confidence that we were doing the right thing".

She was also concerned about "the way certain people were being treated".

Ms Gadhia also said she supported the government's plan to sell its 80% stake in RBS, as announced by Chancellor George Osborne at Mansion House on Wednesday night.

The government provided RBS with a £45.5bn bailout in 2008, paying 500p a share, compared with the current price of 354.8p.

A review from Rothschild investment bank said that, despite this price gap, taxpayers can expect to make £14bn more than they paid out in bank bailouts if the sale of bank assets and fees already received are taken into account.

"I think the taxpayer will have made £14bn - that to me is a success," Ms Gadhia said. "Banks are much more successful in private hands than public hands."

Referring to Virgin Money's acquisition of the good bank of Northern Rock three years ago, she said: "We've created hundreds of jobs and we've lent much more to the UK public through mortgages.

"So, imagine that happening with RBS at the scale that it has as a good bank. I think that the time for that sort of recovery is now and I think it's the right thing to do."

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