Bernard Ginns: Bank breaks its silence for look at opportunities to come

But very little of it has come from the bank itself, which has a policy of not commenting on “market speculation”.

This is understandable, but it can create a vacuum of uncertainty around the future of the bank.

National Australia Bank is carrying out a strategic review of its UK brands, Yorkshire and Clydesdale.

Chief executive Cameron Clyne has said the review, due to complete next month, will lead to changes.

All of which add to uncertainty about the future of the two banks, which have 8,300 employees.

That’s why it was good to hear from Yorkshire Bank director John Hooper who was speaking at a House of Commons reception last week for Yorkshire MPs, business and civic leaders.

And while he did not pre-empt the findings of the review, he did talk about Yorkshire Bank’s plan to take advantage of any forthcoming opportunities in the region. Mr Hooper told the audience how the bank started out as a charity.

Its purpose was to provide a safe place for working people to deposit their savings.

Its long history tells the story of an institution that helped people to achieve their ambitions, either through owning a home or running a small business.

“The banking industry in general and all our companies in particular have lost some of that in recent years and we need to rediscover it,” said Mr Hooper.

The financial services industry is incredibly important to Yorkshire.

According to Mr Hooper, 300,000 people work at 500 financial services-related businesses in Yorkshire, generating £15bn worth of income a year.

Now is a time for great change and challenge for most, if not all, of those employees.

Mr Hooper said that banks “have challenges around capital and how we get a sensible return on it. And while we can’t work that out, the industry will continue to shrink”.

He added: “Some of the bigger banks are fairly spectacular examples of that.”

My example: The enlarged Lloyds has shed 29,000 jobs since its merger with HBOS.

Mr Hooper said a flatter economy, slower housing market, lower levels of disposable income and a general tightening of belts have all had a very strong impact on Yorkshire.

He spoke about how changes in the wholesale money markets are making it harder for banks.

“Funders of banks in general worry about the risks that they hold. That’s less the case now than it was in 2008.

“But it is still there, so banks have got a capital issue and a funding issue that’s making them much more expensive to run and it also means they are struggling to provide a lot of the cash or liquidity they used to in the past. I don’t think that is coming back.”

He said banks in general are faced with a series of challenges that they need to work out with their customers and society at large.

Yorkshire and Clydesdale face a specific challenge which he did not mention: How they can achieve the scale to compete in the cut-throat, low margin banking industry.

Mr Hooper said: “Very few people if any know what the shape of financial services is going to look like in the future so we are going to have to work together to define that.”

He added that bankers must be “less arrogant and listen more”. And he warned that there might be shortfalls between what the public wants and what banks can deliver.

“The world has changed in terms of regulation for all financial institutions.

“It’s much tighter, probably necessarily so, given what happened in 2008 and there are higher costs related to that and significantly reduced operating flexibility, however that does not mean we are capable of delivering things for the community in the future.

“I do have a general optimistic outlook.

“There’s great opportunity in the Yorkshire area now and in the future. We at Yorkshire Bank intend to be part of that.”

That last line should give the 2,000 employees some hope; a senior bank executive talking about the future.

It should also give Yorkshire some hope. As a place, Yorkshire benefits from having its name above a bank with 188 branches. It is perhaps the only region in England with its own bank, whoever owns it.

Whatever becomes of the strategic review and future ownership, I hope that Yorkshire Bank continues for another 153 years, at least, because in an increasingly homogeneous world regional points of difference have value beyond measure.

Mr Hooper was speaking at a reception to celebrate the launch of Yorkshire Vision, the Yorkshire Post’s new business magazine to bang the drum for this region.

@bernardginns