John Flint appointed head of UKIB
By World Infrastructure Journal-
John Flint may have a very impressive banking resume, but his lack of experience overseeing growth investing is concerning for a newly formed bank that needs to grow if it is to serve any meaningful function in the post-pandemic economy.
John Flint’s new role at the UK Infrastructure Bank will be his first major career move since his departure from HSBC in 2019. Flint began his work there as a graduate and spent 30 years at the company, but only lasted 18 months as CEO. This was before finding himself “the victim of a brutal defenestration” that Forbes has claimed was precipitated by his refusal “to move as fast towards the future as his new boss wanted. ”
To be fair to Flint, the position he found himself in less than a year into his tenure as CEO was unenviable. Flint “had been expected to ride a wave of improving profits as global interest rates started to rise and the world economy looked rosy. ” Instead, however, he found himself tasked with navigating a decidedly precarious international market and having to restructure HSBC, as both a corporation and private lender. A man whose expertise lay in day-today management, and who was considered the “safe option” upon his arrival as CEO, Flint was ill-suited to dealing with the lowering of rates from central banks and roiling of geopolitical tensions. His decision to sit on his hands in the face of those circumstances (much to the chagrin of the HSBC leadership) essentially proved as much.
In the months since Flint left HSBC, he has worked on a panel advising the UK government on its laws on ring-fencing (a practice that demand’s banks separate retail and investment banking) and generally found himself looked over for other major banking roles. Santander UK and Lloyd’s banking group, for instance, were recently looking for a new chief executive’s but did not consider Flint according to reports.
Flint’s appointment to the UKIB is, then, something of a surprise given the bank’s role will be to help finance and support an infrastructure-driven economic rebuild during what promises to be a prolonged period of uncertainty in the global market. Moreover, he will have to do so with a paltry sum. The UKIB is currently working with £22 billion, meaning that even if that initial investment succeeds in unlocking “more than £40bn of financing for key projects across the UK” the UKIB is working with less than 10 per cent of the assets that comparable banks in France and Germany can expect to have available to them.
While the UKIB’s initial plan was to fill the role left vacant by the European Investment Bank (which provided about €8bn a year of cheap debt for projects such as London’s Crossrail and social housing) the mandate for the bank has become somewhat more ambitious in recent months. Chancellor Rishi Sunak and Prime Minister Boris Johnson plan to use the UKIB to assist Britain’s efforts to create technologically innovative and environmentally friendly infrastructure, with the hopes that investment in major infrastructure projects will help kickstart a long-stagnant economy and help the UK reach the 2050 net zero goals. This means that the UKIB will need to not only fill the gaps left by the EIB, but also support projects that may make or break the UK’s efforts to reach net zero – and all on a budget that’s too small.
As such, the appointment of a banker best known for being “safe” and feeling uncomfortable with changing strategies on the fly seems less than ideal for the UKIB. While Flint certainly deserves credit for some of his work at HSBC, such as his decisions to place culture and employee mental health at the centre of his management style, it would appear he is ill-suited to the fast-paced precarious environment that the UKIB will be immersed in. As such, though Sunak described Flint’s appointment as an “important milestone” for the new organisation – claiming that “Mr. Flint brings outstanding financial and management expertise which will be crucial to leading the organisation as it grows its operations and starts to deliver on its mission to finance projects in every region of the UK” – it’s a decision that signals a lack of ambition from the central government.
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