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Alexander's Winter Letter

February 2021
Alexander_Hoare

Happy New Year. Last year was hard on all of us, but I am optimistic for this and future years. Whilst the country is burdened with debt and difficulties, there are lots of grounds for optimism.

We are pleased we have been able to provide a relatively seamless service throughout successive lockdowns, opening our counters when safe to do so. Invisible to customers was the extensive work carried out last year on initiatives such as seven-day transaction processing, which is just months away; paperless bank statements, which are in trial; biodegradable Visa cards; and a number of IT infrastructure projects that will facilitate modernising and updating our website, online service and mobile app. This is all with the aim of enhancing the relationship-led services we provide.

It is complicated and expensive providing day-to-day services, making these investments and remaining compliant with burgeoning rule books. We are gratified that almost all customers felt our efforts are worth our new bank-charge tariff.

Our online events have been well received. In our December Winter Talk, our speaker, Jamie Arbib, spoke about profound improvements coming soon to mankind in the fields of transportation, food, information and energy. In the same vein, the bank has adapted well to working digitally and is striving to become more data-driven; customers should benefit as the bank responds to new possibilities and becomes more productive.

In our November talk, we presented Snowball, a social-impact investment firm
co-founded by the Golden Bottle Trust four years ago. It is now open to sophisticated or professional investors. (www.snowball.im)

When we sold our wealth management business in 2016, the partners were left with a very concentrated business: UK retail banking. We started an investment portfolio to make our excess capital work by investing globally and, ideally, outside banking. The non-correlated nature of this diversification worked well in 2020 as the portfolio was one of few areas to exceed revenue budget. When interest rates rise, the process will probably go into reverse and the only reason for mentioning it is to reassure customers that we are trying to ensure the portfolio is a source of resilience and stability, not volatility.

Our work on the bank’s internal culture served us well last year and we scored highly in a recent colleague satisfaction survey. Much work continues in the fields of health and
well-being, inequalities and climate action.

2020 was the Chinese Year of the Rat (normally associated with good fortune and prosperity) and is best left behind. I close with a line from Summer’s Last Will and Testament (Thomas Nashe, 1600): “From winter, plague, and pestilence, good Lord, deliver us!”.

Alexander Hoare
January 2021

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