Thursday, August 12, 2010

You Said What?: Tomalin Reveals Why There Will Always Be Banking Crisis


Taking a leaf from Charlie Prince's notebook, Michael Tomalin, CEO, of NBAD revealed why there will always be bad loans and banking crises in this article from The National:
“The problem if every bank is name lending and you are not is that it puts you in an awkward position,” Mr Tomalin said.
Dance to the music.  And pay the piper later.

Or perhaps, "But, Mom, all the kids were doing it".

5 comments:

Laocowboy2 said...

Sadly he is all too correct. Wise decisions are not always immediately seen as such - and by not lending you impact short run earnings - and therefore your own perceived performance. By the time the bills for name lending come in, you are long gone to retirement in "Donebanking" and whoever got your job had made the stupid loans anyway.

Abu 'Arqala said...

Laocowboy2

It's always hard to go against the crowd.

But there are contrarians ...

Abu Shurki seems to make quite a consistent and nice dinar doing it.

Jamie Dimon at JPMorgan another.

Lloyd and his colleagues over at the Goldmine stopped dancing at Charlie Prince's party went home and shorted the market.

And there's one of my regular posters (with a cowboy hat) who apparently also didn't have a problem turning down loans that everyone else thought fine.

Lemmings tend to wind up over the cliff.

Laocowboy2 said...

Ref Abu Shurki - very much the (high quality) exception that proves the rule. Unfortunately for GCC banking, cloning is haram.

Abu 'Arqala said...

Laocowboy2

How about ...

Abdul Hameed Shoman
Naaman Azhari
One of more of the Audis
Hassan Juma ex NBB? Or was he just a "thrifty"?

Laocowboy2 said...

AA - Agree all of the first three - but then (apart from some dalliances by Arab Bank) most stayed out of the GCC bearpit. Last one more "thrifty" than anything else I believe.

Looking on the bright side however, I remember some of the "characters" in GCC banking in the late 1970's - now those were the Wild East days (albeit that numbers of the losses were smaller). Some of the current problems would seem to bear out the aphorism that "a clever crook is usually less expensive than an honest fool".