The award ceremony, held in the Summer Pavilion at the Tower of London this year, recognises the best and brightest of the bridging world.

British bank Aldemore, which has grown substantially in the last few years, is backed by AnaCap Financial Partners LLP and Morgan Stanley Alternative Investment Partners.

Managing Director of Aldemore Commercial Mortgages, Rob Lankey said: “During 2010 Aldemore more than doubled the amount it lent to small and medium sized businesses.

“Across all asset groups, the bank had outstanding loans worth £410.2 million at the end of the year, compared to £198.6 million at the end of 2009. By the end of the first quarter 2011, that number has jumped to £468.7 million; an increase of 14% in just three months.”

Philip Monks, Aldemore’s CEO, also commented on the company’s growth: “The relative ease at which we are beating our growth forecasts is proof that we have established a very successful and efficient business banking platform. Small businesses clearly like the service that we are providing them with,” he said.

Aldemore is especially pleased with the win due to the fact that the nomination was made by brokers. Mr Lankey said: “Our formula for success has been to deliver what we’ve always promised from the outset: simple products supported by an easy to understand process; the ability to develop tailored solutions for clients rather than simply saying ‘no’ if cases don’t immediately fit; short lines of communications which include giving brokers access to expertise (even if it’s out of hours and late into the evening) and, perhaps most importantly, fast decisions.”

He added: “Feedback from brokers has ben excellent and they seem to genuinely appreciate that they can access everything they need under one roof at Aldemore.”

Looking to the future, Aldemore hopes to continue its success. “Being voted the Best Commercial Lender twice in a row was fantastic, but it’s our intention to make our service even better during 2011.

“We’re currently midway through the implementation of a major systems upgrade project, which should go live later this year and which I firmly believe will enable us to open up our lead even further,” he said.

Article contributed by Bridging and Commercial

The survey, conducted by EPSI Rating, is based on a pan European model already used to benchmark banks in 11 other countries, over 20 years.

Professor Jan Eklof, coordinator of the survey commented, “This survey shows that customer satisfaction with Handelsbanken is significantly higher than the industry average and that the bank’s customers are also very loyal. This separates Handelsbanken from other specially analysed banks in the study and depicts results which are consistent with surveys undertaken in other countries.”

Handelsbanken’s decentralised approach allows them to adapt quickly to the requirements and wishes of its customers, with decision making being made locally by its branch managers. This may appear to be a simple proposition, but it is one that is proving successful for the Swedish bank in the UK.

Handelsbanken, which has a rapidly expanding network of over 90 across the country was ranked top by both its business and personal customers in terms of satisfaction and for customer loyalty.

The survey follows record growth numbers in the UK by the bank during 2010, opening 21 branches and the announcement of the opening of a third Regional Head Office in Birmingham to support further expansion in the UK banking market.

Anders Bouvin, head of the bank’s operation in the UK said, “To be ranked top for the second year running in an independent customer satisfaction survey is of course very important for a relationship bank like ours. We have been running the bank according to the same principles for the last 40 years and it appears that our decentralised and customer orientated model is more appreciated now than ever. The fact that we don’t have sales targets or bonus schemes allows us to focus on what really makes a service organisation like ourselves successful in the long run, customer satisfaction.

“We believe in growing our business in a safe and considered way with the emphasis on a very personal relationship with individuals and businesses,” he said.

“The fact that we’re a large Swedish bank with stable finances and a good credit rating by international rating agencies also gives comfort to our customers. The leading financial newspaper in Sweden, Daggens Industri, recently ran an article describing Handelsbanken as the “Safest bank in the world”.

Handelsbanken first came to the UK more than 25 years ago to cater for Nordic businesses and their British subsidiaries, but quickly realised the potential to provide universal banking services locally; the branch network that has followed is one of the most successful branch banking operations set up outside of the high street banks.

The Complete Banker distils and encapsulates the best of Chris’s extensive expert commentary and research reports.  Covering key themes in retail, commercial and investment banking and the way they are being changed by economics, politics, technology and society, the books tackle serious subjects head-on, but in a very user-friendly way, seasoned by Chris’s unmistakeable viewpoint and voice, proving that it’s possible to be  informed and entertained at the same time. If you want to understand the business of banking better, or if you just want to get to grips with a specific aspect of it, then the Complete Banker series gives a neat and compact analysis of each key area of banking you may want to consider.

Money for Nothing and your Cheques for Free – How banks process payments, from small transactions on your mobile to billion-dollar international transfers

If you think that money is important (and who doesn’t), then so is the ability to process money – in other words, payments. And that’s what this book is all about: from processing payments over the internet and on your mobile telephone; to payments via cards, cash and cheques; to massive international payments operations and the challenges faced by banks in these areas, including the continual vigilance needed to avoid money launderers and terrorists.

Socialising the Antisocial Bank – Converting the antisocial bank by digitally connecting with customers to become part of their community

Most banks are anti-social. They don’t engage with customers to ‘delight’ or ‘exceed their expectations’, mainly because customers don’t expect anything different. That doesn’t mean it cannot change. The social media revolution is rapidly turning this planet on its head. So, if you want to work out how to be a social bank and connect with your targeted communities of customers, this is a short guide as to how to do it.

It’s Banking Jim, But Not As We Know It – Creating tomorrow’s bank by identifying the most critical strategic changes and trends in banking today

The future is uncertain.  However, if you could identify the most critical things likely to occur in the future today, then you could capitalise commercially upon the opportunities presented.  So that’s what this book is all about: what are the most critical things that will occur in banking tomorrow that, if you invest in them today, mean that you can make your fortune. A simple enough premise. So, if you want to work out how to the most successful bank you can be during the next decade, then this is the book for you.

Not Every Bank is Goldman Sachs – Tracking the rise of algorithmic machines and high frequency trading through a deregulated investment world

Are the investment banks a dangerously out of control threat to the global financial system, or do they bring innovation and liquidity to the market and alpha returns to their investors? Whichever your view, the investment world is changing and you need to know which are the key trends to track. This book reviews all of these areas and more. So, if you want to understand capital markets and investment banking and just why they get those big bonuses, this is a guide for you.

The Extraordinary Madness of Banks – Understanding the credit crisis, and the bankers, regulators and politicians involved

This is not a book about the financial crisis.  This book is about the outcome. It tracks the markets from the day that Lehman Brothers collapsed, and before with Northern Rock, through the reactions of policymakers, politicians, regulators and markets.  It shows where the weaknesses were in hindsight, and where the pitfalls may be in foresight.  It tries to give the reader a chance to absorb and understand the key movements that created the crisis, and the explanation of why banks, bonuses and bosses are still at the trough feeding and greeding their way through the issues faced.

Chris Skinner has been providing independent, expert commentary on the key developments in banking for over a decade in his role as Chief Executive of Balatro and Chairman of the Financial Services Club.  He is now perhaps best known for his daily blog at http://www.thefinanser.com/, and his writing for other media, such as The Banker magazine since 2004.  He is also a key commentator on banking for prime time news channels including the BBC, Sky and Bloomberg.

By Ann Tierney, Searching Finance  http://www.searchingfinance.co.uk/

The bank has also increased deposits from savers by 12% to £304m in Q2.

Aldermore was the first of the new wave of post credit crunch banks to be launched in the UK. Aldermore’s lending activity is focused on small and medium sized businesses.

Comments Phillip Monks, Aldermore CEO, “It is a great result and we really seem to be building a lot of momentum. It is an especially strong performance as we have been careful to ensure that we are lending only to credit-worthy and robust SMEs.

“We have also studiously avoided taking on more in deposits than we can sensibly put to work.

“Even with those restraints, we are growing at the kind of pace that we feel really vindicates our proposition, which is to provide savers and borrowers with straightforward, transparent and fairly priced products.”

Aldermore explains that much of its success in attracting new business, both from SMEs looking for funding and from savers looking for a competitive interest rate, has been driven by word of mouth.

Phillip Monks explains they have undertaken their expansion with minimal advertising.

Says Phillip, ”That says to me that there is huge pent up demand from SMEs for funding to help them expand.

“Similarly there is a huge pool of consumers out there who feel that the range of savings products they are offered have too many strings attached, are too opaque or just offer a poor interest rate.

“But I have worked in banking for a long time and although we know we are delivering great growth now, we are going to make sure we don’t get complacent. Banks always seem to make the mistake of taking their customers for granted.”

Aldermore says that the key to its savings strategy is simply to offer consistently competitive rates. All their fixed rate bonds and ISAs have featured in the Top 10 of the appropriate Moneyfacts Best Buy tables throughout the year. Existing customers are offered either the same or higher rates than those available to new customers.

Aldermore says that it is following the same principles as it rolls out its mortgage offering which is developing a strong following amongst professional financial advisers across the country.

As part of the expansion of its SME lending operations, Aldermore opened a new office in Reading on August 16th.

Aldermore already has eight offices across the UK in Glasgow, Manchester, Cheshire (Wilmslow), West Yorkshire (Cleckheaton), Birmingham, Peterborough, Oxford (Abingdon) and Maidstone.

Contributed by Aldermore

The UK banking industry is set for a year of change in 2010, as several new banks from Tesco and Virgin to Metro Bank attempt to enter the sector. Traditionally a stronghold of the Big Four, these new movers and shakers will need to work extremely hard to make a significant impact on the UK retail banking landscape. However, there is a great opportunity for the new players to leapfrog the competition through the use of more sophisticated and agile technology. The ability to implement systems and processes with a technological ‘clean slate’ gives these banking start-ups a huge potential advantage – if they can capitalise on it.

So as these new banks come onto the scene, what do they need to consider from a technology infrastructure point of view?

The customer comes first
A priority for financial institutions must be on understanding their customers better. By setting up an environment that enables them to get a complete ‘customer view’, new banks will be better placed to track customer activity, prevent fraudulent transactions and encourage increased customer use and activation of bank products. In order to win the confidence of disaffected customers, institutions need to offer added-value, and if appropriate, tailored services to their customers to help build their relationships. New entrants from the retail space, such as Tesco, will have a highly developed understanding of these techniques. The industry will be watching with interest to see how they apply their existing customer knowledge to their retail banking offering.

For corporate customers,  better reporting of their payments from all channels and offering dashboards and trend analysis services will prove popular. On the retail banking side; there is much focus on innovative new technologies, such as contactless, NFC and mobile, but the number of transactions generated by these emerging channels is still low. It is the traditional card-based payments that continue to account for significant transaction volumes and revenues. While it is important that banks can use new technologies where relevant, they must also ensure that their current products remain competitive so that they bring in that important core payments revenue.

Back to the future
Most new banks will start off with relatively small UK operations, depending on how they have entered the market. However small they are to start with, it will be crucial to their future success that they build scalability into their processes to effectively future-proof their technology. For example, banks may initially choose to offer a limited selection of cards to their customers, with a view to extending this further down the line to include a wider offering and multi-application cards.

When making early technology choices, it is important to ensure that systems are agile enough to react to the changing market place. This will be particularly important to the brand new banks that are likely to adapt their plans over relatively short time frames as new opportunities become apparent.

Another consideration will be the increasing movement towards agile payment systems or more integrated systems that are capable of handling payments from any channel, whether consumer or corporate, from start to finish – with no redundancy of technology, or duplication of processes and labour. These agile systems will enable financial institutions to manage transactions quickly and effectively, with less need for manual intervention and costly interfaces between different systems.

Buyer beware
It is important to differentiate between those financial institutions that have chosen a strategy of organic growth, and those that have acquired smaller players to gain a foothold and the beginnings of a branch network in the UK.  For instance, in January 2010, Virgin announced the acquisition of Church House Trust to “provide the platform from which [to] develop a retail banking business in the UK offering a full range of products to consumers under the Virgin Money brand” (Times Online, 8 Jan 2010, ‘Virgin Money buys minnow for retail bank launch’). Banks that decide to take this strategy must carefully consider whether they should utilise and adapt existing technologies, or if it would be more effective to start from scratch from an IT perspective.

Conclusion
While the Big Four are likely to retain their dominance of the UK retail banking market in the short-term, any increase in competition will certainly cause concern for banks that are dealing with dissatisfied customers and public anger at recent scandals surrounding the financial crisis and bankers’ bonuses. These smaller, more reactive competitors could certainly shake things up through the use of innovative and agile technologies, and this in turn can only be beneficial for customers.

Andy Brown, ACI Worldwide

Article originally published by Financial World / ifs School of Finance

Image copyright: Flickr

Over the past year, the media has been full of terrible news about the availability of credit to most companies, especially SMEs. Many lenders, even relatively healthy ones, seemed to have tightened credit standards considerably.

This has often made life, already difficult in a weak economy, even more challenging for many companies. On this background, it is illuminating to look at the lending practices of Svenska Handelsbanken (also familiar to readers of the news because they just topped customer satisfaction polls.)

The common approach to lending is illustrated by the first graph which shows lending to corporate customers in the Eurozone. Most banks influence their lending decisions top down depending on their views on the economy and their outlook for loan losses. This can reduce the influence of the loan officer handling an individual case. The loan officer might have performed a thorough quantitative and qualitative analysis of the prospective borrower. But in this system, a loan that would have been approved a year ago is now declined. This is illustrated by the chart: at the beginning, when the economy was still recovering from the dot com bubble, banks were still fairly strict in their lending standards. But as the economy started growing nicely and steadily from quarter to quarter (the blue line), lending standards (the green line) were relaxed more and more. The result: loans to corporate customers were growing faster and faster (the red line). The moment lenders see signs of a weakening economy, lending standards are reined in and loan volumes fall as a result. This approach seems rational only for five seconds because drastically cutting off lending exacerbates the economic contraction that lenders were afraid of in the first place. And this policy generally leaves banks with loans made on wafer thin margins in good times when quality can really only get worse, but they do not make loans on much better margins at the trough of the cycle when credit quality could arguably only get better.

Figure 1: Eurozone GDP growth (quarterly), lending to corporates and bank lending standards

Handelsbanken, by contrast, does not change its credit policy over time. It does not believe in GDP or other macro forecasts. It rather believes in sound credit analysis of an individual customer. Hence no need for the bank headquarters to tell the loan officer at the front line how to do his or her job. In addition, the bank believes in Warren Buffett’s insight that “it’s only when the tide goes out that you know who is swimming naked”. In other words: during good times both good and bad credits look similar, but in tough conditions like today’s it is fairly easy to spot the good customers you want to continue lending to. Handelsbanken’s bankers have a much more satisfying and intelligent job where they can use their expertise and judgement to come up with their own best credit decision.

As a result of this policy, Handelsbanken’s lending to corporates is highly counter-cyclical. When everyone else is competing to lend, Handelsbanken’s market share drops, and when no loan is to be had from any other bank, Handelsbanken keeps lending happily and increases its market share again.

Does it work? By following this very simple and common sense approach, Handelsbanken has achieved a twin goal of having higher margins than their competitors AND loan losses that are consistently about 50% lower. The bank follows the same approach with the same results in other countries such as the UK. The loyalty to their customers even in bad times may be one of the reasons behind their stellar customer satisfaction.

Unsurprisingly, many other banks are looking at the Handelsbanken model today. Experienced loan officers should be in for a bright future.

Figure 2: Sweden, lending to corporates

Article contributed by Niels Kroner, author of ‘A Blueprint for Better Banking‘

Article cover image copyright: Flickr

Aldermore is the new name in British banking which will provide a range of competitive asset finance facilities for small and medium sized businesses.Borne out of the recent merger of Ruffler Bank and Base Commercial Mortgages, Aldermore is shunning the ‘big is best’ approach adopted by larger banks, in favour of a ‘specialists succeed’ strategy adopted by successful companies in other market sectors.

Phillip Monks, Chief Executive of Aldermore, explains: “Small and medium sized enterprises have had enough of dealing with banks which do not understand either their markets or needs. Aldermore intends to address this issue head-on, by providing a service which is unashamedly specialist.

“We will only operate in markets where we have a real understanding of their requirements. We believe that if we can construct financial deals based on a detailed understanding of the needs of specific market sectors, then we can succeed in areas where bigger banks have failed to show any real interest.”

The business banking services offered by Aldermore will include commercial mortgages, asset finance and leasing facilities, which will be funded via retail deposits raised via a range of fixed rate bonds, notice accounts and ISAs.

Monks said: “Being small and specialist has proven time and again to be a successful strategy for many thousands of British businesses and I believe banking is no different. It is time for banking to get back to its roots and that is what Aldermore is setting out to do.”

Small and medium sized businesses can get further information about the services being offered by Aldermore by going to: www.aldermore.co.uk or by phoning 01733 404515.

Phillip Monks, CEO, Aldermore

Phillip.Monks@anacapfp.com