SOME of East Anglia’s top bankers admitted ‘we got it wrong’ when they met the region’s MPs and business people.
The men in charge of small business finance with five top banks spoke of recruiting ‘relationship managers’ to return to personal contact. But some appeared shocked as the Federation of Small Businesses’ members revealed how bad banking relationships still were.
The meeting at Lynford Hall Hotel, Mundford, was organised by Bury St Edmunds MP David Ruffley and Thetford MP Elizabeth Truss with the FSB. It was attended by 11 Norfolk and Suffolk MPs including Chloe Smith, who is economic secretary to the Treasury as well as Norwich North MP.
The bankers were HSBC’s area commercial director James Howlett, RBS’s small business chairman Peter Ibbetson, Barclays’ divisional director James Cliffe, Lloyds TSB’s area director for commercial banking Steven Elson and Santander’s regional director Martyn Dawson.
MPs spoke of complaints from constituent businesses over getting finance, of terms of business changing without warning and of just talking to anyone in their bank.
After hearing how bankers said they were improving their relationship with business, Mr Ruffley asked for a show of hands from the room of who felt they had a poor relationship with their bank. Nearly half put their hands up and one called out: “That assumes they’ve got a relationship!”
Mr Howlett said: “I’m genuinely sorry about that. Without customers, we’ve got nothing. What am I going to do about it? For a start, share the content of this meeting. If [staff] are saying ‘we think we’ve got good relationships’ I’m going to say this is what I saw.”
Mr Ibbetson admitted: “We all went down the sales route and got it wrong, now we’re trying to turn it round.”
Business people complained of dealing with far off call centres and of relationship managers changing frequently. Business finance consultant Mike Brown asked why the most experienced managers handled big businesses who had few problems while less experienced staff managed the new and small businesses.
The bankers said they were trying to bring experience back to the front line. Santander was taking on directors with an average age of 40 to 45, Lloyds TSB was bringing in specialists in certain business areas, Barclays was setting up a department of experienced people staff could consult and RBS promised to get its ‘grey hairs’ back to the front line.
FSB regional treasurer Peter Martin said one member’s charges on a small overdraft was equal to a rate of 1,050 per cent. Others complained of overdraft facilities suddenly withdrawn.
Banks were also criticised for changing business terms with one businessman saying he had taken out a £1.3 million loan over 20 years to find the bank had changed it to three years but was unable to show him letters about the change.
Tony Abel, of Thetford house builders Abel Homes, said they were ready to build again but their bank had refused finance. Mr Ibbetson said RBS, among others, had been ‘over exposed’ on property and was not taking on such business.
Ms Truss called on the banks to tell people when terms of business changed or if they did not want to invest in a certain field, so people could seek alternative banking.
Mr Ruffley said afterwards that a practical outcome had been a promise from the banks to meet MPs regularly to discuss problems. He added: “It was surprising how some of the complaints from the audience came as news to some of these senior bankers.”