Lloyds TSB is faced by a dilemma competitors would love to have to handle: how to remain the developed world's most profitable retail bank. Peter Ellwood, the group's workaholic chief executive officer, has some well-honed ideas on this task. Rival banks would do well to heed his strategy, otherwise they might become part of the solution: even after spending more than £6 billion acquiring Scottish Widows, Lloyds TSB is still on the prowl.
"Our governing objective is to maximize shareholder value and we measure our success by doubling shareholder returns every three years," says Ellwood. This is set in stone and Ellwood is not persuaded by the argument that HSBC, which has copied Lloyds TSB's success strategy, is aiming to achieve the same objective on a five-year basis. "It is important to keep this three-year target before us," he says. "But it's more likely that it can be done through mergers and acquisitions than simply by organic growth. For a group that is worth some £ billion to double shareholder returns every three years organically will become increasingly difficult. To take a company and make it £90 billion and £180 billion and so on simply organically is not something that can be done over the long haul."