Howard Davies: Greta Thunberg, Alipay & Making Annuities Great Again

The RBS chairman and Management Today columnist takes a trip to America.

by Howard Davies
Last Updated: 19 Sep 2019

It was a busy summer. My carbon footprint was heavier than usual, uncomfortably so. I hope I don’t run into Greta Thunberg on a dark night. 

Shanghai was both optimistic and sobering. The conference at which I spoke included all the leading lights of Chinese finance, from the deputy premier down, and several London luminaries. For once, Americans were notable by their absence – a rather subtle Chinese response to Trump’s trade wars. Don’t make a fuss, just leave them off the guest list. That creates something of an opportunity for London to offset Brexit, maybe. A new link between the London and Shanghai stock exchanges was launched with great fanfare (this was before Hong Kong's bourse made a bid for the LSE). 

The sobering bit was a side visit to Ant Financial, which we used to know as Alipay. It still runs the mobile payments network and told us it now has a billion customers worldwide. Of course, all business numbers in China have a telephone character to them but a billion is quite a lot, nonetheless. RBS has more than 10 million account holders, and we think that is quite impressive, but in China it seems rather niche. The Chinese payment networks now process more transactions in a year than Visa and MasterCard combined. 

To look for the missing Americans, I popped over to New York for a baseball game – the Yankees against the Toronto Blue Jays. It was armed forces day, so parachutists descended on the diamond and recruiting sergeants paraded around. We all lustily sang the Star-Spangled Banner, Take Me Out to the Ball Game, YMCA and O Canada. Or at least the Toronto coach and I did, in the case of the last one. After all that, the game turned out to be supremely dull and when baseball is dull, a goalless draw between Stoke City and Middlesbrough doesn’t come close. 

Still, I left with a spring in my step. New York’s exotic licensing laws require everyone to have their ID checked before buying even a taste-free low-alcohol near beer. Somehow I found it invigorating to be asked to prove that I am over 21. They know how to cheer up an old guy Stateside. 

New York, of course, is not exactly representative of Trump’s US of A. Nor is California. Dinner conversation in the city centred on the 20 live contenders for the Democrat nomination, most of whom are unknown in their own congregations. They spend their time trying to knock spots off the front-runner, Joe Biden. Most look as though they would be singularly ill-suited to fight back against a Trumpian Twitterstorm, so the betting is on four more tweet-filled years. 

Lansing, Michigan, is a bit closer to Middle America. The little-known state capital is where Prudential has its US headquarters. We are the biggest employer in town after Michigan State University, famous for its ice hockey. The town is sliced in two by a railway, along which mile-long trains trundle noisily on their way from somewhere a long way away to somewhere else. 

There is nothing smaller on offer in the most upmarket restaurant than a 16oz steak, a bit more than one wants after a long flight. The waitress had us down as hopeless wimps when we asked for children’s portions. We tried to make it up to her by downing a healthy amount of Michigan red wine, which takes a degree of fortitude and resilience. The lengths to which we will go in the interests of our shareholders. 

The US business centres on selling variable annuities (look them up) to American retirees. We do it rather well, but annuities have had a bad press for a while so the industry is trying to boost its image. One strategy involves a job lot of red baseball caps with Making Annuities Great Again printed on them, which look just like those the President wears to his rallies of the faithful. 

It was quite a witty joke in Lansing, where they know about annuities. But I thoughtlessly put it on one Sunday morning back in Dorset as I popped down to the garage for some charcoal. A tattooed local put his arm round me and said how thrilled he was to find another Trump supporter, giving me his two penn’orth on the virtues of a bloody big wall and of sticking it to the Chinese at last. I did not have the heart to suggest that he put his contacts in and take a second look at the cap. We parted the best of friends. So I will have to go five miles further for my fill-up next time. 

No diesel consumed on my final trip, though. I am in the middle of a plan to cycle the length of the Rhine. I do it in sections, as the chances of finding three consecutive weeks to do the whole thing in one go are small. This time it was Konstanz to Basel over a long weekend. Beautiful country but surprisingly strenuous for a ride that is supposed to be downhill. So I needed a lot of sustenance in the evenings. With our competitive new no-deal exchange rate, a couple of decent dinners in Switzerland emptied the holiday piggy bank.

Next year I may have to cycle the length of the Manchester Ship Canal. 



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