Queen's bank manager puts his head above the parapet

WHEN bank manager meets customer, it is meant to be the client who feels nervous. Except when that client is the Queen. Then the bank manager is entitled to feel a little overawed. But Gordon Pell, who was last week named as head of Coutts, banker to the Royals, appears remarkably relaxed.

Likening his new role to commanding the SAS, Pell says: 'Everyone knows what Coutts is, but hardly anyone knows what we really do.'

It is a mystique he is happy to preserve. Yes, he admits, there is a Coutts cash machine in Buckingham Palace. Yes, you could conclude that he has some very important guests in the bank's sumptuous Strand boardroom with its walls covered with antique Chinese silks. In fact, he adds, the Queen Mother - whose £4m overdraft with the bank hit the headlines last year - popped in for lunch a couple of weeks ago.

But bank managers being what they are, he refuses to divulge the secrets of the Queen's credit card bills or her schedule of standing orders.

What is clear, though, is that Pell, who started at Lloyds bank ' winding clocks and emptying dustbins', relishes his new role.

After 29 years with Lloyds, Pell claims still to have a little green and black running through his veins. But the past couple of years have been what one might describe as 'interesting'. Recruited to add weight to a woefully depleted NatWest board at the time of Royal Bank of Scotland's hostile takeover bid, Pell is now on a fast track to the top.

'It was a very strange Christmas,' he recalls of late 1999. 'After 29 years with Lloyds, my wife and I held hands and said, 'Well, here we go' and jumped off the cliff.' Pell did, of course, have a parachute of golden threads, but he maintains the move was the most daring of his business career.

He also had the advantage of being married to a senior partner at City lawyer Herbert Smith. Wife Marian was ranked Britain's 38th most powerful woman, but last week she decided to throw it all in to study music at King's College, London.

One of the few top NatWest executives to be taken on by RBS, Pell masterminded huge changes in the combined banks' retail services. Unlike many rivals, Pell gave customers the phone number of branch managers rather than shunting them through frustratingly anonymous call centres.

'I've always judged my success by customer satisfaction,' he says. It sounds trite until he explains why. 'It was the worst decision of my business career. I'd just taken over marketing at Lloyds in 1990 and we were introducing black chequebooks. I liked them and I take at least partial responsibility. But there is a mile between an idea and its execution.

'One glossy black chequebook looked fine. Trying to produce nine million of them was quite a different issue - they became like blotting paper.

'Women complained they couldn't find them at the bottom of their handbags or write their shopping lists on the covers. We pulled the whole thing six months later and it taught me not to believe in focus groups or consultants but to listen to customers.'

It is a skill he will need in spades at Coutts - also part of the RBS banking empire - where banking is free only if you have more than £3,000 in your current account and where customers expect a significant return when they invest the odd £25m.

Yet Pell - tall, good-humoured and somewhat owlish - clearly believes that Coutts is about to stage a business breakthrough, even though it recently jettisoned 'poorer customers with less than £500,000 in liquid assets.

He has relished the retreat by rivals who spent so much trying to break into the market for the new super-rich. Reckoning that the likes of Lloyds, HSBC and Merrill Lynch spent more than £1bn between them in the attempt, he says Coutts now has a clear run to capitalise on its traditional strengths.

'We already own those customers,' he says. 'They bank with us so we are in a prime position to sell them other products. It's a question of getting a larger share of their wallet. The others are all trying to do it the other way round - and they are failing.

'There are bodies strewn around us,' he adds, lapsing into the warlike metaphors born of coming from two generations of soldiers, coupled with a fascination with military history. 'It's like Custer's last stand. We're the only cavalry in the field and are a good two years ahead. We're going to roll our tanks down the hill while everyone else is in retreat.'

Coutts has about 70,000 prestigious account holders worldwide, with 50,000 in the UK. Its customer base is growing at about 10% a year and, for the first time, claims to be poaching business from its blue-blooded investment rival, Cazenove.

If it becomes a headline-grabbing spat, so much the better as far as Pell is concerned. Coutts recently broke with hundreds of years of tradition to advertise its wares to the 'uneducated wealthy'.

At least two of the Spice Girls, many Premier League footballers and a galaxy of Hollywood talent are already signed up, but Pell says there are plenty of multi-millionaires out there who are unaware of Coutts' 300-year history of catering for the super-rich. Having had a low profile in a world full of grey bankers at Lloyds, Pell now appears to relish having his head above the parapet. 'It's quite fun, really,' he says. 'It was hugely personal during the NatWest bid and that became quite traumatic for my family. I can see how Tom Cruise finds it debilitating after a while. But I don't mind publicity.'

Openness goes only so far, however. Like the Queen, Pell admits he has a Coutts account but refuses to go into detail about his wealth. 'I don't think it's absolutely necessary to be a millionaire to talk to Coutts customers at the right level. I do - but in terms of wealth I'm a minnow compared with most of them.'