Access to Finance

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Access to Finance 11th June 2009
Challenging hearts, minds and communities Yorkshir
e Humber LEGI...the story so far
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Richard Hudson Bradford Kickstart Richard.hudson
_at_bradford.gov.uk
Challenging hearts, minds and communities Yorkshir
e Humber LEGI...the story so far
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Mainstream Support Alex McWhirter Simon Riley -
Yorkshire Forward The banks view HSBC
RBS The needs of business
Challenging hearts, minds and communities Yorkshir
e Humber LEGI...the story so far
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Access to Finance Conference17 March 2009

• Nick Missin
• Head of Commercial Centre, Bradford District
• HSBC Bank plc
• nicmissin_at_hsbc.com

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Key Issues for Businesses
. and Banks

• Availability of Credit
• Cost of Credit
• in the context of the current economic and
  regulatory environment

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A Deep Recession?
Long-term average
HSBC forecast
UK annual GDP growth
Source ONS
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A Historical Perspective
dotcom bust
first oil shock
yuppie flu
second oil shock
The Great Depression
subprime contagion
1972-77
1978-83
1988-93
1998-2003
2007-11
1929-34
Source ONS, HSBC
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Lending Growth Slows
Annual growth in outstanding lending
Lending to companies
Mortgage lending
Credit cards
Personal loans
Private non-financial corporations
Source Bank of England
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A Return to Old-fashioned Banking?

• Know Your Customer - a 2-way relationship
• PARSERS
• Lending Guidelines
• Cash is King
• Up to date financial information, projections and
  sensitivity analysis
• Due diligence and pre-lending reviews

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So What Will Banks Fund Nowadays?

• Trading businesses and SMEs
• Real Estate - restricted
• HSBC 1 billion working capital fund
• Structure of funding is key
• Invoice Finance
• Asset Finance
• Trade Finance
• Risk mitigation - FX IRP Credit Insurance
  Keyman
• Enterprise Finance Guarantee

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Enterprise Finance Guarantee

• Purpose
• Definition of viability
• Business security
• Personal security
• HSBC scheme criteria
• Risk v Reward
• default rates
• interest margins, fees, premiums

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Key Issues for Businesses
. and Banks

• Availability of Credit
• Cost of Credit
• in the context of the current economic and
  regulatory environment
• Banks are open for business
• Communication is 2-way

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RBS / NatWest Business and Commercial Banking

• Access to Finance Conference
• 17th March 2009
• Liam Kane - Regional Director West Yorkshire
• Ian Foster - Director Bradford

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RBS / NatWest Business and Commercial Banking

• Customers are at the
• Heart
• of Everything we do

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RBS / NatWest Operating Model in West Yorkshire

• Quality Service
• Outstanding Relationship Management
• Training and development
• Customer Education
• Product Development
• Relationships with external partners

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What are RBS/NatWest doing now to support
customers?

• Regional SME Fund
• Enterprise Finance Guarantee
• Specialist Relationship Management
• Capital Repayment Holidays
• Overdraft / price promise

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What are RBS/NatWest doing now to support
customers?

• Invoice Finance with Bad Debt Protection
• Sale and Leaseback of Fixed Assets
• Literature
• European Investment Bank funding
• SMARTA.com

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Summary

• RBS/NatWest put Customer Service at the top of
  the agenda
• The more regularly we talk (and listen) to our
  customers the better solutions we can provide.
• We are committed to lending an additional 250m
  in Yorkshire and Humber in 2009
• We believe it is in all parties interests to
  support viable businesses in W. Yorkshire
• RBS/NatWest continue to develop innovative
  products, funds and models to support businesses
  through the recession.
• Liam Kane 07833 664597
• Ian Foster 07889 969280

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The Needs of Businesses
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• Views of Businesses-
• (recent Chamber survey of members views)
• 95 concerned about late or non-payment of their
  invoices
• 92 worried about falling sales

Challenging hearts, minds and communities Yorkshir
e Humber LEGI...the story so far
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• Views of Businesses-
• 53 said better access to finance would help
  their business
• The financial world has changed it is now
  uncomfortable and strange, relationships between
  businesses and banks have become strained.
  Business confidence remains very low and salary
  cuts, pay freezes, shorter hours and recruitment
  bans are now being implemented in many local
  businesses.

Challenging hearts, minds and communities Yorkshir
e Humber LEGI...the story so far
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Anzeck Plastics
Badar Chughtai Oscar Chughtai
Challenging hearts, minds and communities Yorkshir
e Humber LEGI...the story so far
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So what should local Councils, Business Link and
the RDAs be doing to help businesses better
understand what is available out there, or is it
all best left to the private sector to sort?
Challenging hearts, minds and communities Yorkshir
e Humber LEGI...the story so far