Ex-Treasury mandarin Kingman to chair Tesco Bank
Sir John Kingman will be appointed to the board of the supermarket’s banking arm later this month, Sky News learns.
Sir John Kingman, the former Treasury mandarin who orchestrated the rescue of Britain’s banking system during the 2008 crisis, is being lined up as the chairman of Tesco’s financial services arm.
Sky News has learnt that Sir John is close to being appointed as a non-executive director of Tesco Bank.
Sources said this weekend that he would then replace Graham Pimlott as the lender’s chairman once Tesco Bank has received formal approval from City and banking watchdogs.
If confirmed, the appointment would come just weeks after the supermarket giant announced the sale of its mortgage book to Lloyds Banking Group in a deal worth about £3.8bn.
It would also represent a major coup for Tesco, which surprised the City by announcing that Dave Lewis, who has run Britain’s biggest retailer since 2014, would step down next year.
Mr Lewis will be replaced by Ken Murphy, a senior executive at Walgreens Boots Alliance, the owner of Boots The Chemist.
Sir John’s decision to accept the Tesco Bank role will reaffirm his recent assertion that he is not a candidate to replace Mark Carney as governor of the Bank of England.
He was a key figure in the rescue of the UK’s stricken banks a decade ago as a senior official at the Treasury.
Some £45bn of taxpayers’ money was pumped into Royal Bank of Scotland and more than £20bn into Lloyds in a bid to keep them afloat.
Sir John went on to run UK Financial Investments, the agency which managed the taxpayer stakes in the two lenders, before returning to the Treasury and then moving to Rothschild, the investment bank.
He was recruited again by the Treasury in 2012, but four years later lost out to Tom Scholar in the race to become the finance ministry’s permanent secretary.
In 2016, he was appointed as chairman of Legal & General, the insurance and pensions giant and became the inaugural chair of UK Research & Innovation, a body established by the government to exploit scientific development more effectively.
More recently, Sir John called for the abolition of the Financial Reporting Council, the audit watchdog, following a string of failures.
He recommended the establishment of the Audit, Reporting and Governance Authority – a statutory body with greater powers to fine and sanction than its predecessor.
Sir John’s recommendations are expected to be implemented in full by the government.
His arrival at Tesco Bank will underline the grocer’s belief that its financial services business remains a core part of its operations.
Its retreat from the mortgage market was signalled earlier this year, and has since been echoed by rival J Sainsbury.
In Tesco’s case, the decision to exit the home-loans sector was attributed by Gerry Mallon, its chief executive, to “challenging market conditions” which it said had “limited profitable growth opportunities”.
Ironically, the advent of ring-fencing for the UK’s biggest lenders, a key structural reform designed to make banks safer, is among the factors that have prompted banks’ mortgage pricing to become more competitive.
That has made it harder for challengers to make inroads into the market.
Tesco Bank began offering home loans in 2012, and currently has about 23,000 mortgage customers on its books.
It offers a range of other financial products, but like other British banks, has been forced to pay out millions of pounds in compensation to customers who were mis-sold payment protection insurance.
In the group’s half-year results announcement this week, it said Tesco Bank’s profit from continuing operations had slumped by more than 70% – partly as a result of the PPI scandal.
Mr Pimlott’s departure from Tesco Bank will come after almost 12 years on its board, the last seven of which have been as chairman.
A Tesco Bank spokesman declined to comment on Saturday.
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