God's banker may glory in his nickname, but making the Co-operative Bank both ethical and profitable was no saintly matter.
Religion and banking have more in common than people might think. There is the same obsession with ritual; the same concern with harmony; and the same desire for architectural aggrandisement. Moreover, the two have both declined in standing. Once the local priest and the local bank manager were twin pillars of the community: the one spiritual, the other secular. Both were guardians of a moral order that was protective, paternalistic - and intrusive. No more.
Given this state of affairs, it is curious that the country's most popular banker (admittedly, the choice was rather limited) is a man who trades under the title Saint Terry. This is the nickname rival bankers have bestowed on him. They repeat it with sneers in their voices, as if to emphasise how hard-nosed and commercial they are.
But Saint Terry himself does not mind being called names. In fact, he relishes it. 'I'm seen as a pain in the arse by other bankers. My reputation goes before me, you know. They call me a character. The next thing, it's God's banker. They pull my leg.' God's banker earned his saintly reputation when he took over as managing director of the Co-operative Bank in 1988. It was here that other bankers learned what they were up against. Until that time the Co-op was considered an earnest and worthy institution, fine for northern grannies collecting their blue stamps, and for bearded do-gooders to deposit their meagre savings. But a serious bank? Banking was, after all, a no-nonsense capitalist business.
On the cover of the Co-op Bank's annual report for 1992 are the following words: 'Can a bank influence the future of the planet? On its own, of course, it cannot. Yet its actions can lead to other organisations becoming more responsible and its customers can exert pressure on society for change. Together they can sow a seed which will grow to benefit society.' There is more unsettling material inside. The bank reports a profit for 1992 of £9.8 million, compared with a loss the previous year of £5.9 million, and, before that, a loss of £14.8 million.
This was the outcome of the bank's new ethical policy, aimed at clamping down on anything it disapproved of, and kicking out customers whose companies were not whiter than white. A bank that is not only ethical, and caring, but also profitable? This was not only serious, it was dangerous - at least that is what rivals thought. But, of course, this was the pre-ordained reaction.
The life of Terry Thomas is not much of a saga - too humdrum and too ordinary - but it would make a reasonable drama. A story about a banker who does not much like banking. And of how he got his revenge.
He was born in 1937 in Carmarthen, South Wales. His father was a transport manager and his mother ran a greengrocer's shop - a lower-middle class background, solid and respectable and unexciting. He went to grammar school and then did his National Service at the Woolwich Arsenal. He was offered the chance to fight in Cyprus, but he was no hero. Besides, his girlfriend at the time - she is now his wife - was living in Streatham.
When he left the army, he began work in Bristol as a bank trainee, at the National Provincial. The company was later merged with the Westminster Bank to form the NatWest. This was in the 1950s, when banks were still run on the old principles of sound money and sound morals. It was there that Thomas first experienced the idea of the bank manager as moral guardian. 'You had to ask permission to get married,' he recalls. 'The bank manager met your fiancee to check that she was suitable. He also visited your first house to make sure it was an appropriate place for a bank official to be living.' But Thomas suspects that even then bankers were beginning to feel uncomfortable about their priestly roles. 'I remember my manager being acutely embarrassed about it.'
Branch bankers started at the bottom in those days. Thomas began with a short spell as a messenger before moving into the back office to do ledger work. 'It was a very labour-intensive process,' he recalls. 'You could spend hours pouring over the books looking for discrepancies. The next rung of the ladder was remittance clerk, then securities clerk, finally foreign clerk. You numbed your skull with row upon row of figures. It was deadly boring work but you had to do it before you could get another job that was more interesting.'
He was finally rewarded for these years of dedicated filing and checking when he found himself in the elevated position of manager's clerk. 'I was a sort of gofer.
This meant I had to anticipate everything the manager would want to see when he came in at about 10.30am. But that was the testing ground to see if you were going to make it to manager.' Thomas made it, but his apprenticeship was far from over. From Bristol he moved to Newport, Gwent, this time as a senior clerk. 'That was even more tedious than being a manager's clerk. The job was entirely about checking other people's work.' From there he moved to Bath as an assistant manager. Clearly he had been singled out as managerial material: another 10 years or so and, at the age of 40, he would be ready to take charge of his own branch. Yet the tedium of his apprenticeship had already soured him. He was a married man with children, so he felt his options were limited. In an attempt to get out of this straightjacket, he applied to do a course in industrial administration - an early kind of MBA - at Bath University. The National Provincial thought this a strange idea but let him go. They agreed he could return once he had graduated. However, by the time he came back - to what was by then NatWest - he was no longer traditional bank manager material. 'I was expecting praise for completing the course, but when I went to see the personnel manager, he just looked at me and said: "Well, you are quite a problem."' Finally they came up with an idea. The bank, in 1970, was experimenting with credit cards, and Thomas was sent off to work as a personal assistant to the man creating the Access card. He spent his time persuading the major retailers to accept the card and negotiating terms with them. 'It gave me some experience of selling,' he recalls. 'That changed my career. For the first time I got a taste of freedom and competition. For somebody who had come from the soft underbelly of retail banking that was quite an experience.'
In 1973 he became marketing manager at the Co-op Bank. Here the story shifts gear. The years Thomas had spent working his way up the ladder had convinced him that he did not much like bankers. Now he was to start getting his revenge for all the figure-checking that the National Provincial had forced upon him.
'I had decided there had to be more to life than the very restrictive career of a retail banker,' he recalls. 'My father thought I was off my trolley, but I felt comfortable there, and with the wider ideals of the co-operative movement. NatWest had offered me a post in their regional office, but I didn't want to be a gofer any more.'
Thomas had found himself a secure bunker on the margins of the banking fraternity; a good place from which to start taking pot shots at his old colleagues. He lobbed his first bomb in 1975 when the Co-op became the first bank in Britain to start interest-bearing current accounts, coupled with free banking. 'We had a big in-flux of up-market accounts, even though changing your bank account was not the sort of thing a gentleman would do in those days,' he recalls. 'That made us very unpopular with the other banks,' he adds with relish.
Thomas had a break from skirmishing with the clearers when he was moved, in 1983, to become managing director of the Unity Trust Bank, a partnership set up between the Co-op and the trade unions to look after the money in the union movement. Five years of that prepared him for his current role, which he took over in 1988. He had returned to his old battleground.
A salesman at heart, Thomas went on the offensive. He pushed a home banking service which is now the most widely used across the whole customer range, and a lifetime gold visa card that is the biggest gold credit card in the UK. Yet, his salesman's instincts told him that the ground had subtly shifted during the five years he had been running the Unity Trust Bank. The clearers were now much more aggressive, and outflanking them on freebies and gimmicks was no longer enough. Anything he came up with they would soon imitate, if it worked. So he hit them where it hurt. He delved into the traditions of the co-operative movement to outflank them ethically. This was a cunning move. Not only did it chime with the '90s return to moral values, it also capitalised on the customer's growing unease with the villainy of bankers.
Thomas feels affection for the movement, although he is well aware of its weaknesses. 'Parts of it are like a music-hall joke,' he says. But he sympathises with the ideals which are rooted in the pre-socialist labour movement. Hence his bank's heavy, upfront promotion of its ethical stance. After laborious market research to check that it would not offend too many people, he launched it with a series of high-profile advertisements.
Among the policy's pledges are a commitment not to deal with any oppressive regimes, not to finance the sale of weapons, tobacco, animal furs, animal experiments, or exploitative farming methods. The policy also promises to encourage business customers to take a similar stance. It also prevents the bank from speculating against the pound. This is something, Thomas says, it did not do during the last sterling crisis. The policy is, he believes, a powerful card, and one that has left his rivals bewildered. About 10% of the population, his figures tell him, support the ethical stance strongly enough to switch accounts. He would be more than satisfied with 10% of the market. Currently he has around one million personal customers, so he still has some way to go to reach that target.
So far his impact is limited. The Co-op, whatever Thomas does, will remain a marginal player. Technology, Thomas believes, will help. By 2020, he forecasts, the branch network will be a thing of the past, banking will be by telephone and television and small players such as the Co-op will be able to compete more effectively with the big four clearers. In the meantime, he goes his own way, lobbing bombs at the bankers, and sitting back to watch the explosion. It is a pastime he thoroughly enjoys. Yet, his career is tinged with irony, because it is by giving banking back its priestly role that he has caused the greatest stir. The idea of a bank manager monitoring his customers' lives and advising them what is right and wrong would have seemed only natural in the 1950s. Admittedly though, the manager in Bristol who came to inspect Thomas's wife would have found the idea of not dealing with farmers who were cruel to their animals absurd. But ethics change over the years.