Yorkshire beefs up business banking workforce

YORKSHIRE Bank has bolstered its small business banking workforce and unveiled a clutch of new deals to lure entrepreneurs and start-ups.

The bank yesterday revealed further details of plans to boost its market share in the sub-£1m turnover business sector, in a bid to capture unhappy established businesses and an expected flood of new firms.

Yorkshire, which together with its sister bank Clydesdale is owned by National Australia Group, said it has added 50 staff to create a new team of 100 small business relationship managers across the UK, specifically targeting this sector. Of these, 50 are in Yorkshire.

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The bank aims to capitalise on what it sees as a retreat from the small business sector by bigger rivals Barclays, Lloyds, Royal Bank of Scotland and HSBC.

It hopes the foray will extend the bank’s market share of small firms beyond its current three per cent level – although the bank declined to reveal targets.

“The evidence suggests that the small business market is underserved by the big banks,” said Gary Lumby, director of small business banking.

“We see this as a great time to correct that and build on our already successful business banking approach.”

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A recent report by the Bank of England flagged concerns from small businesses, many of which are still struggling to gain access to credit.

It said while big firms have seen an improvement in credit conditions, “small firms reported that conditions remained very tight, both in terms of cost and availability”.

Britain’s big banks last week agreed a deal – dubbed Project Merlin – to curb their bonuses and boost their business loans to £190bn this year.

However, Nationwide Building Society last year took a step back from the small business sector by closing its Business Investor account to new customers and limiting the number of account transactions firms can make.

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“They (big banks) are either moving up the food chain so they are focusing on medium-sized businesses or they’re moving to an internet-based channel,” said Mr Lumby.

“What we’re trying to do is play exactly in that space.”

Yorkshire and Clydesdale’s small business proposal will be administered through their network of 72 business banking centres, 340 branches, plus call centres and online. The lender will target businesses with turnover of up to £1m, although extending to £3m in some cases, which require financing of up to £250,000. Larger businesses will be referred to financial solutions centres.

Start-ups will be offered 24 months of free banking, while established businesses choosing to switch from a rival to Yorkshire will be offered 18 months’ free banking.

Yorkshire’s expansion in the small business market, revealed last month by the Yorkshire Post, will target the 3.9 million small business banking relationships in the UK.

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Relationship managers will be “a lot more proactive”, added Mr Lumby, the former head of retail at Yorkshire Bank. It plans to recruit more as the service beds in.

Managers will have to spend at least two days every six months in a customer’s business, “to get a better understanding of what it’s like to run a business”. The bank will also introduce a 48-hour service agreement.

Its managers’ portfolios of businesses will total a maximum of 250 cases, compared with staff at rival lenders who can be managing up to 700 accounts each.

“Small businesses are the lifeblood of our communities and economy,” said Mr Lumby. “We’ve been listening to them and have developed our business to help them develop theirs.

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“We see a real opportunity to offer a credible alternative; establishing local relationships to help small businesses flourish, with local knowledge and services that suit their needs, in branch, online or by phone.”

Smaller businesses requiring loans of less than £25,000 will be handled by a telephone banking service, also run by relationship managers. However, a Yorkshire Bank spokesman added the lender will not “chase volume at the expense of quality”.