Monday, 14 February 2011

So the bankers want to be loved - it'll take more than a couple of press releases!

Fascinating story in this week's PR Week, namely that the entire banking sector is going to employ a PR agency to rehabilitate its reputation.

Apparently, there is great concern that bankers are no longer viewed as supportive by SMEs. That's probably because bankers aren't supportive of SMEs.

As a case in point, I recently visited a small precision engineering company in the North East which has won a major aerospace contract for the new Airbus. In order to fulfill the order more efficiently, the company decided to spend approximately £70-80,000 on new capital equipment, namely machine tools.

The MD made a big presentation to his bank (who shall remain nameless) and then nothing more was heard. Phone calls were not returned, emails were not answered. Finally, two months later the answer came back. "No, we think you are going to go bust."

There was of course no evidence of this, the bank manager concerned just assumed that every company in the manufacturing sector must be teetering on the brink. How massively supportive?

In the end the MD turned to his own savings, credit cards and Finance For Industry to help him invest in the equipment needed and fulfill the promises made to his customer.

My point is that it is going to take a lot more than a barrage of press releases to rehabilitate the banks amongst SMEs. What is required is for the banks to regain the trust of the business community and the public in general by making credit, namely the principle of buy now pay later upon which modern society is founded, actually available, in the form of loans for capital equipment and mortgages for you and me.

Much was promised by Project Merlin last week, but even a cursory read of the fine print demonstrates that the banks have inserted plenty of caveats, which the more cynical amongst us believe will be used to renege on the promise to deliver £190 billion this year in credit for business.

Time will tell.


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