Banking can be a grubby business and perhaps no part is grubbier than the process of pitching for business. The dark art of winning mandates is what separates rainmakers from losers. And mastering the art of marketing to clients is as crucial for a banker as the technical science of knowing how to price risk.
Peter Geldart has written what he calls a 'monograph' aimed at helping young bankers learn how to position their bank and their own services. Geldart is well placed to know what he is writing about, having been a banker for 23 years in London and Hong Kong.
He also spent five years as the finance director of CLP Group, one of Hong Kong's largest companies and so has experience of being both the pitcher and pitchee. His insights are extremely valid.
The book perhaps suffers from the fact that Geldart is back to being a banker again and his respect for client confidentiality means that readers hoping for pages of real life horror stories of pitches going hideously wrong will be disappointed. There are many fictitious scenarios, which clearly have their genesis in real life, but Geldart goes a long way to protect the protagonists.
However referring to 'a certain Houston energy trader' takes the line of anonymity a bit too far. You can say anything you like about Enron; you cannot libel the dead.
One anecdote that will no doubt be familiar to many is the story of one bank's credit department flatly refusing a loan for a large corporate client on the basis of its bad governance, only to find that the chairman of that company was one of the biggest clients of the bank's private banking arm. Joined up banking at its best.
Still, the book is more helpful than entertaining and it offers sensible, solid and ethical advice. At times it reads more like a textbook than a memoir and that is presumably the intent. But it offers more than just a list of do's and don'ts.
Indeed, it is unlikely that many business books would see fit to say why it is important sometimes to lose a mandate and how to go about making sure you do. Or why in some cases you should worry when you do win a mandate. It is further helped by an erudite and direct style. Indeed, if Geldart chose to change career again, he would make a good financial commentator.
Without giving the whole book away, a selection of some pithy advice includes:
- 'The secret of winning the mandate is therefore to ensure that you are at least every sponsor's second choice'
- 'There can be no better way of showing that you have not taken the trouble to know your customer thoroughly than to display, on the cover of your pitchbook that you are ignorant of a recent (or worse, not-so-recent) change in its name, legal structure or corporate image.' [NB this goes for investment banks pitching for certain magazine awards as well]
- 'Anyone with nothing to say should not be present'
- 'If you do decide to wheel out the big guns, it is essential... that their salvoes are targeted precisely and your pitch is not blown up by friendly fire'
The book is made up of such sage words although much will be old hat to those who spend their lives pitching for, losing and winning mandates. The jargon might grate for the general reader, although Geldart has provided a glossary of investment-banker-speak at the end to soothe the nerves.
In some places the book flirts with the obvious without offering the final, telling recommendation. For instance, Geldart suggests bankers find out everything they can about the personalities involved in the company they are pitching to. But he does not say how he would go about this, keeping those tricks of his trade, close to his chest.
Overall, the impression becomes that it is very hard to say in general terms what differentiates a winning pitch from a losing pitch. It is like the difference between art and pornography; you know it when you see it. But by following his advice, bankers can make sure they do not commit any obvious errors.
Money for the Bank could also be useful for those corporate executives who are on the receiving end of those endless hours of bank sales pitches. They can use it as a template against which future presentations can be judged and mandates awarded.
The book is a valuable insight into the murkier depths of the banking business. Geldart shines a light where darkness has prevailed in an honest, thoughtful, wise and lighthearted way. I would not be surprised if it became required reading for graduate trainees.
Money for the Bank is available from online booksellers such as Paddyfield.com and Amazon.com.