Lloyds TSB is lending and has the proof
PUBLISHED: 12:09 05 April 2013 | UPDATED: 21:25 05 April 2013
The reputation of banks is at an all-time low and many people say they are not lending. 'We are', says Lloyds TSB which has good news to share.
Lloyds TSB is lending and has the proof
The reputation of banks is at an all-time low and many people say they are not lending. We are, says Lloyds TSB which has good news to share. Nicky Godding met senior managers from Lloyds TSB Commercial Banking in Gloucestershire, Oxfordshire, Berkshire and Wiltshire.
Its been a tough few years for the banks, thanks to mis-selling scandals, accusations of rate fixing and whopping bonuses. Those working in the industry were almost as reviled as tabloid journalists and kept a very low profile. And so they should, you might shout after all, it was the banks that contributed largely to the financial mess.
To cut a long debate short a lot of people who should have known better, from Governments down to individuals, simply forgot basic rules of finance.
Not surprisingly therefore its been almost impossible to entice a banker out of his or her bunker to talk in anything more than the most general terms about the role that banks are playing in the rebuilding of the British economy, until now.
Lloyds TSB, which is 41% owned by the British taxpayer, is ready to talk. And having kept relatively quiet for so long, it was difficult getting this local commercial team to stop. Over two hours we chatted about broader business banking issues, but also a lot about the businesses they were working with and the issues they faced. It was evident that these managers really do know their geographical territory and want to help.
Lloyds TSB Commercial Banking deals with small and medium sized enterprises (SMEs) turning over up to 25 million annually. SMEs account for 99.9 per cent of all private sector businesses in the UK, 59 per cent of private sector employment and contribute around 60 per cent of Britains GDP. It is a crucial segment of the British economy and deserves support. Lloyds TSB Commercial Bankings lending to small businesses has gone up four per cent in the SME sector where the total overall lending has dropped by four per cent.
To survive and grow banks must lend but fewer businesses have the confidence to borrow, according to Karl Leitelmayer, Lloyds TSBs Commercial Banking Senior Director of SME Banking who covers Gloucestershire, Wiltshire, Berkshire and Oxfordshire.
He said: Fewer people are asking banks for money and have reduced their borrowings because they dont want to be so reliant on the banks. We are getting out there, talking to them and learning about their business so we can give proper guidance based on realistic expectations. Banks must lend and businesses must grow otherwise our economy will remain where it is for years. We have to build confidence.
His team is having some success. Across Gloucestershire and Oxfordshire, Lloyds TSB Commercial Banking lending rose 5.2 per cent year on year in the first nine months of 2012, a large proportion in healthcare, property, manufacturing, independent schools, not-for-profit organisations and professional businesses (such as legal and accountancy practices).
Karl adds: At this point in the business cycle and with the huge support that the Government is pumping into the economy through such initiatives as Funding for Lending, its never been a better time to borrow money. If youve got a viable business, we want to lend you money to help it grow.
So why are businesses not coming forward? Criticism over the years has been leveled at banks for demolishing the traditional customer/bank manager relationship where all loan applications were taken away from the local team and booted upstairs to faceless regional teams who didnt know the local market. Lloyds TSB Commercial Bankings local managers have discretion to lend up to 500,000, which more than meets the needs of the majority of businesses his team meet every week, according to Karl.
We want to be known in the local markets and we are getting out and about more than weve ever done before.
Its a world away from the traditional image of local bank managers who simply had to sit behind a mahogany desk and await the ting of the banking hall door. Now its all about networking and relationship management, or without the jargon, meeting the customers face to face and finding out what they really need.
Banks do still have a lot to do to restore their sectors reputation and active local banking teams can really help. According to Karl: Lloyds TSB ran a survey which asked what people thought of banks, and the response wasnt very flattering. But when that survey asked them what they thought of their local bank manager, there was much more positive feedback.
High performance from Abingdon-based YASA Motors
Lloyds TSB will be announcing the winner of the second Lloyds TSB Enterprise Awards 2013 this month. The Awards are part of Lloyds Banking Groups commitment to start ups and growth firms and aims to support the estimated 55,000 student businesses across Britain that are striving to make their mark. The Awards are open to current students or recent university graduates (within the past five years) across England, Scotland or Wales who have run a business for at least one year and are over the age of 18.
Last year Oxfordshire-based YASA Motors, near Abingdon, won the 50,000 prize.
YASA Motors designs and manufactures high performance motors for electric and hybrid cars and agricultural vehicles, which are up to three times smaller and lighter than commercially-available alternatives and have very high efficiency.
Founded as a spin-out from Oxford University by Tim Woolmer, YASA Motors began trading in 2009 and already employs 24 members of staff and has a number of high-profile automotive clients, including supercar manufacturers.
In March 2012, the company took home the prize for Best Enterprise at the Lloyds TSB Enterprise Awards, having been judged as the business showing the most potential for growth over the next five years.
The award included a 50,000 cash prize to invest in the business, in addition to an earlier 5,000 prize from the regional heats, and a two-year mentoring award from a Lloyds TSB senior executive and free legal advice from an independent specialist law firm.
With business still going strong, the company is winning new clients and aims to have its products incorporated by a major automotive manufacturer within the next five years.
Tim Woolmer, CTO and founder of YASA Motors Ltd, said: Its been a great year for us at YASA Motors, and winning the award has increased our profile in the space that we work in, helping us to continue attracting new, talented engineers to the company.
Growth in our industry can be slow, as it takes a number of years from the initial design to reach high-volume production, but interest in our products is increasing steadily and were currently working on a number of projects with customers in a broad range of sectors.
The mentoring support originally focussed on the companys plans for the coming year and how these could best be achieved along with longer-term goals, but mentors are also able to stimulate discussion and act as a sounding board for new ideas and strategies.
Karl Leitelmayer of Lloyds TSB Senior Director, SME Banking said: YASA Motors is a great business that has developed a high quality technical product into a successful business within an incredibly competitive sector.
The enterprise award recognised that they knew their business and sector inside out and that they had both the passion and plans necessary for future growth.