42 finance
Traditional banking values for modern businesses
Customers can expect a return to traditional banking values and the help of well-informed, qualified RBS business bankers says Chris Sullivan, chief executive of the RBS UK Corporate Banking Division and a member of the RBS executive committee, reporting directly to Stephen Hester.
Visiting Reading this month, Sullivan gave John Burbedge of The Business Magazine an exclusive interview, and revealed how RBS corporate banking is changing to “put the old bank manager back in the street in a modern way.”
Sullivan led Lombard Asset Finance (still part of his RBS remit) to a leadership position in the UK and Europe, through the simple principles of “knowing your customers and their businesses really well; providing a fair deal for a fair price; having a set of people who are expert in their field; and putting those things together to create value for your customer.
“And, that is the exactly the philosophy I have been putting into RBS,” said Sullivan, appointed to his current position in August 2009 and responsible for the UK's largest banking portfolio of 1.2 million business customers, from SMEs to global bue-chips.
Much has been happening internally within RBS since the 2008 recession, and Sullivan admits it needed to.
“We should apologise as a banking industry overall. UK banks lost sight of their customers; started to think about the bottom-line without understanding how they were obtaining that. It started to happen, and some of the older bank managers began to say that they didn't become a banker to sell products, and we lost a generation of qualified, trained bankers.
“All I'm trying to do is to reverse that process and put the old bank manager back in the street in a modern way.”
Traditional banking in a virtual age? “My guys will be there, however our customers want them. Customers should be able to do what they want, through whatever channel they choose, whether that's a personal visit or via an iPad.”
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businesses, also enabled 48% of all UK loans to SMEs. “I can't see why I shouldn't take up the position as SMEs' champion of the UK.”
But, lack of business confidence remains a major problem, says Sullivan. UK business deposit accounts with RBS are at record highs. Overdrafts are at their lowest usage level for years. “I have plenty of money to lend. There is plenty of liquidity for businesses, but they are not prepared to use it at the moment.
“Banks have always been are part of the UK community, and RBS is using its creativity to bring forward ideas to instill confidence in people, but we can't force people to borrow. We can't do it all on our own.
Chris Sullivan (left) visits electronics power supply company, Stontronics. Pictured here with Terry Branston, finance director (centre), and Paul Branston, managing director
Sullivan set about re-establishing that proven professionalism two years ago.
He insisted all RBS relationship managers should be qualified bankers, and set up a fully accredited Institute for Fiscal Studies curriculum. This year all RBS managers will be accredited to foundation level. “Within two years, I want the sophistication of our skills and qualifications to match the complete requirements of the customer base.
“My proposition is that if you are a businessman, you'll get a qualified banker in front of you – that's what you deserve.”
Suitably-qualified RBS bankers at a local level are also now able to make 'on-the-spot' loan decisions of up to £500,000. RBS is currently piloting an “Expert Lender“ scheme designed to produce faster and consistently better decision-making on loan applications.
Qualifications and theory are not enough, says Sullivan. RBS now runs a “Working with You“ scheme. RBS managers spent 4,500 days last year actually working within their customers' businesses. “Our decisions will be better informed if we get good input from those who understand and are closest to customers.”
Sullivan says bankers need to re-establish themselves as valued and trusted partners to businesses. “We become a valuable partner to businesses when we support them through thick and thin, help them
become more sustainable, more efficient and help them grow.”
Guaranteed overdrafts, a 24/7 business support hotline, sector specific industry funding, support for government initiatives, and creative funding packages to suit the needs of modern businesses, are all ongoing RBS offerings designed to underpin confidence and help boost activity.
Is it working? Latest figures says Sullivan, show that RBS loaned 22% more than last year. His division, which represents roughly 30% of UK
“If businesses don't start to see the positive opportunities, then we are going to sit in this mire forever. I think the UK is in a better position relatively than most countries in the world to move forward, and we (RBS) need to play a big part in that, as does the Government and entrepreneurs themselves.
“There is more confidence here in the Thames Valley than in other UK regions. You are leading the UK out of the downturn. You have faster moving industries, used to adapting and making themselves relevant to the market environment. People here see the opportunities, and our job in RBS is to understand how we can help that opportunity become a reality.”
Accountants support a general tax amnesty
An indepth survey published in March and conducted by leading national audit, tax and advisory firm Crowe Clark Whitehill, which has an office in Reading, reveals that more than three-quarters of accountants would support a blanket tax amnesty or General Disclosure Facility (GDF) with nearly four-fifths of respondents prepared to mention such a facility to 20 or more clients, if introduced.
The Liechtenstein Disclosure Facility (LDF) and UK/Swiss Taxation Agreement Survey summarises the replies of nearly 100 accountancy firms and was conducted to measure accountants' awareness, knowledge, and perceptions of the LDF, for the second year, and the Taxation Agreement, for the first time.
The number of accountants prepared to support and publicise a general tax amnesty is in stark contrast to the small number that have publicised the Liechtenstein Disclosure Facility (LDF).
The survey reveals over 40% of accountants not having mentioned the LDF to any clients at all, with those that have only notifying a relatively small number of clients.
The LDF was introduced by HM Revenue & Customs (HMRC) in 2009 to recoup taxes on assets held in offshore accounts. Any taxpayer who discloses previously hidden assets and unsettled tax liabilities will face a 10% penalty as opposed to a maximum HMRC penalty of up to 100%.
THE BUSINESS MAGAZINE – THAMES VALLEY – APRIL 2012
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