As he chatted to the staff, few observers would have guessed this 38-year-old had just been put in charge of four operating divisions, 50,000 employees and 60% of the group’s £4.7 billion profits.
Only a couple of hours earlier, HBOS had announced a boardroom reshuffle that included the retirement of George Mitchell from the board after 40 years. But the promotion of Hornby caused the biggest stir in the City, where he was quickly acclaimed the heir apparent to take over from James Crosby at the helm of Britain’s fourth-biggest bank.
Hornby, who has been at HBOS for only five years, had been handed the newly created post of chief operating officer in which, from the July 1, he will be responsible for the insurance and investment arms as well as retail banking.
Hornby was made head of retail banking after the merger of Halifax and Bank of Scotland and since then profits in the division have soared by more than 70%. The Halifax brand has been transformed and HBOS is now growing faster in terms of market share than any other British retail bank.
Even so, few in the City know Hornby. As one observer said: “Hornby is always talked about as the young hot-shot but you never see him around and nobody knows much about him.”
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Hornby was at Oxford University and then came top of his class at Harvard Business School. He went to work for Asda, where he was head of the George clothing brand. Crosby recruited him to Halifax in 1999 and he joined the board at 32 to become one of the youngest directors of an FTSE 100 company.
“My retail background has helped hugely,” said Hornby. “At Asda I learnt a great deal from Archie Norman about the basic principles of retailing. I’ve had to learn a lot of the technical stuff about pricing and so on, but the basics of good service and dealing with customers are the same. I have combined clear, simple products with an aggressive advertising strategy and a motivated workforce. If you get these right, it works.”
Other banks have been watching carefully and are now recruiting retailers too.
Hornby’s rise at HBOS has not been unchallenged. Mark Tucker had been recruited from Prudential and had been considered next in line as chief executive but he defected back to Prudential in a move that shocked HBOS.
One analyst said: “The arrival of Tucker as the new glory boy slightly put Hornby’s nose out of joint. Now he has gone, HBOS definitely seems to be refocusing on Hornby’s success and performance.”
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But Hornby said there was still some way to go. “We've been growing so fast that now we can really challenge the clearing banks. Our goal is to achieve 20% market share in the next 10 years in current accounts, credit cards, general insurance and investment products.”
HBOS’s insurance and investment arms were brought together with retail banking under Hornby’s leadership so that the bank will be able to cross-sell more aggressively.
“We have 22m customers at the moment but few have more than one product,” said Hornby. “Over the next few years through aggressive marketing of simple, clear products there is huge potential for growth here.”