Financial service centres are proving a big hit, says Eric Gunn

Published on Sunday 3 February 2008 20:18

CLYDESDALE Bank is witnessing a 20 per cent surge in business banking as a revamped strategy appears to be paying dividends.

Eric Gunn, divisional director of business banking, believes Clydesdale is largely immune to the current credit crunch with the bank shunning the subprime market, and instead concentrating on growing its level of deposits.

He also says the bank has benefited from focusing on Scotland's small and medium-sized firms, along with family businesses, while larger rivals have moved to attract plcs.

Gunn says: "We are different and have been through a painful process. We have decluttered our offering and are based solely on relationship-banking. We are not completely out of the woods yet, but our growth is evident."

Creating financial service centres, described as one-stop-shop banking facilities for companies, has been the catalyst for the change in Clydesdale's business banking offering. Operating as standalone units, with a managing partner, partners and associates, Gunn says the centres give staff flexibility to make their own investment decisions in a "club-like" environment. There are 74 such facilites operating across the UK, with 15 in Scotland employing 600 staff.

Bringing on board external advisers as chairpersons for the centres has proved vital. It means that industry experts such as Pat Machray, the former chief executive of accountancy firm Johnston Carmichael in Aberdeen, Archangel founder Peter Shakeshaft in Edinburgh and former Hibs board member Ken Lewandowski in Glasgow are available to mentor and guide Clydesdale clients.

Gunn adds: "All the chairs are key figures in the city or area they operate in. We did not want the centres to be intimidating. We wanted customers to feel they can come and use the facilities and meeting rooms as their own. We've had fashion shows, annual general meetings, speed-networking events, jewellery sales and property seminars and it seems to work."

In Glasgow, the bank's "financial solutions centre" – which opened its Waterloo Street doors in May 2005 – is one of the busiest in the UK, enjoying record levels of lending and new business.

Clydesdale claims to have now picked up almost a quarter of the business banking market in Scotland.

Recent deals include the 19 million funding for the TKC Alba development of a new business park in Livingston and the 30m development of a luxury student village at Springside Key in Edinburgh.

Gunn says there is a desire now for the Clydesdale to do things differently. After a turbulent few years with redundancies and branch closures, Gunn, who has worked for the bank for more than 29 years, says he feels the staff have embraced change.

"The market has changed," he admits. "There are more creative instruments in banking for funding and more levels of debt. Our culture, focus and strategy is different. We are in a good, strong funding position and our market remains strong.

He continues: "We know our customers, or members as we call them, appreciate the way we do business with them. They get local decisions made promptly, without fuss."

In the specialist area of acquisition finance, Clydesdale Bank has had a record year and has overtaken its rivals in the field of management buy-outs in Scotland. In the first three months of 2007, the bank handled 16 transactions to a value of 80m.

The full 12 months of 2006 were also a record for the bank's specialist and acquisition finance team, led by Jack Ogston. The largest deal was the management buy-out of Giles Insurance in July 2006 for 45m.