Gunther insists SL Bank here to stay

Gunther says the bank is central to Standard Life's group strategy in the UK

STANDARD Life Bank is not for sale, will continue to exist as part of the demutualised Standard Life, and with a mortgage book topping 10.2 billion, it will continue with its strategy of offering newer, flexible products. The prediction comes from Anne Gunther, the bank's chief executive and one of Standard Life's most high-profile characters in recent months.

Gunther insists that the bank, often seen by sceptics as little more than a depository to make sure that cash from maturing Standard Life policies is kept, is central to the group's strategy in the UK, and will be an increasingly important contributor to the group's overall success.

"Our products sit well alongside the group's range of financial products and it wouldn't make sense to sell it off because its value is inevitably linked to its brand name," she says.

"New business is coming not just from savings and mortgage products but from opportunities elsewhere in the group - for example, taking cash deposits as part of the self-invested personal pension [SIPP] product."

Gunther has been chief executive of SLB since March 2002 and has specialist skills in directly-provided financial services, including contact centres, e-commerce as well as operations, marketing and strategy development.

Previously, she was managing director of direct channels at Lloyds TSB, covering everything outside branch-based banking such as contact centres, ATMs, internet and independent financial advisers. As a graduate trainee with NatWest since 1976, she worked across various divisions but ended up as head of telephony banking.

Banking was not her first love as she harboured ambitions to be a deep-sea oceanographer after completing a degree in physics from Nottingham University. She also holds an MBA from Warwick University.

"I wanted to combine my academic leanings with my love of the sea and becoming a oceanographer became my goal. However, I soon found out that although there were plenty of women in research posts, doing Phds in labs, none really made it through as in those days it wasn't really a career open to women."

Taking part in the graduate recruitment milkrounds allowed Gunther to realise she was commercially minded. Despite running the student bar at Nottingham University, she still hadn't made her mind up about where she wanted to specialise. "I hadn't thought about banking, but Natwest was very exciting, having just merged, and from all the graduate recruitment schemes, it stood out as one of the best.

"It was a great training and I spent a lot of time working throughout the UK, especially in London and Manchester. I looked after 40 branches up the M4 corridor from Hammersmith to Weldstone. It was a fantastic experience and then I moved to Natwest home loans.

"It was difficult to leave Natwest because I felt I had grown up there. But the move to Lloyds TSB was a huge challenge. I knew I had the specialist knowledge in the direct banking area and there was an added Scottish connection because I loved sailing around the west coast."

The move to Lloyds TSB involved creating contact centres, internet banking support teams and working with the customers to deliver the best products. When she was approached by Standard Life to replace Neil Ross, it was a challenge she couldn't refuse.

"I had spent some time in Edinburgh and knew the financial scene through the purchase of Scottish Widows. I'd also spent sailing and walking holidays in Scotland, so felt I could make it work.

"I looked back on my work at Lloyds TSB and thought about what worked and I brought that with me. The challenge was to bring together mortgages and direct banking experience. I was also interested in life companies having never directly worked for one but being around the edges with Natwest Life and Scottish Widows," says Gunther.

Standard Life Bank had already opened its doors in January 1998, offering a selection of personal and business savings products. In January 1999, the firm entered the UK mortgage market with its Freestyle mortgage and now employs just over 800 staff. Currently, the bank holds its own mortgage book of over 10bn.

In 21 January, 2004 it announced a profit of 4.6m, for the year ending 15 November, 2003 and, under Gunther's tenure, it has doubled its mortgage book.

Last year, she also revealed that the bank maintained its own profitable growth in 2004, after first breaking into profit in 2003. Profit before tax for the 13.5-month period was 9.1m compared with 4.6m for the 12 months to 15 November, 2003. This move into profit in 2003 was a year ahead of plan.

"In 2003, Standard Life Bank moved beyond the start-up phase and we are now a mature, successful business, able to stand on our own two feet. We will continue with the implementation of our plans to grow the bank on all fronts.

"It is paramount that we continue to build by providing value to our customers through innovative, flexible products and excellent service. In particular, I expect to see a greater emphasis on customer loyalty in our industry.

"I believe customer loyalty begins with lender loyalty - Standard Life Bank will continue to innovate with that in mind."

With mortgages under management of 10.2bn and with the average indexed loan-to-value ratio of the mortgage book falling from 46.3 per cent to 44.7 per cent, its arrears (customers three or more monthly payments down) were 0.12 per cent at 31 December, about a sixth of the industry average.

Gunther chaired the Council of Mortgage Lenders, succeeding Clive Wood of HSBC in 2004. She says her main concern on taking the role was to ensure that the mortgage market was not used as a political football and that any proposed policy interventions were held up to scrutiny. However, the top of her task list at Standard Life Bank remains "more of the same".

"It is an absolutely fascinating job where no two days are ever the same. We've managed to grow our business and we're now about the same size as the Yorkshire Building Society, yet they have been in existence for 150 years. It's been a tremendous growth and we have a great team, so that growth will continue," concluded Gunther.