LTSB_GYB January 2008 use
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The quarterly business newsletter from Lloyds TSB Scotland January 2008 • www.lloydstsb.com
Preparations in place for sustainable future Lloyds TSB Scotland’s steady growth and prudent investments will help protect customers from any adverse conditions ahead GROWTH PLANS LLOYDS TSB Scotland’s commitment to quality and the strength of its management systems will allow it to continue expanding the range of services it provides to Scotland’s business community during 2008, despite any economic impacts from the credit crunch. Manus Fullerton, Director of Corporate and Commercial Banking for LTSBS, said 2007 had been an exceptionally good year for the bank, with growth being experienced on every front. “The value of deals we were involved in went up, our asset growth was strong, we maintained our margins at a healthy level, and we look forward to reporting continued growth in our profitability.” As a result, he said the business was extremely well placed for 2008. “We have always focused on quality, which is reflected in our performance and the strength of our book. “Next year could be a very difficult year, with the impact of the credit and liquidity crunch,”
Manus Fullerton, Director of Corporate and Commerical Banking
more transparent, and pricing changes to reflect risk and capital requirements. We believe we will be setting the quality agenda in terms of our capital position, our systems, how we approach the market and the strength of our balance sheet.” Manus said LTSBS’s strategy has been to grow step by step, without overstretching. “We now have the structures and size to extend our offering. We will continue that approach and, in 2008, we will further expand our presence in Aberdeen and bring in new expertise in the oil and energy markets, including renewables.”
Home comforts
Over a barrel?
Raising the bar
Support for affordable housing
Will oil prices have an impact on the economy?
Steps taken to reduce carbon footprints
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Manus said. “Clients and banks will need to work together through this cycle. Amidst all the unknowns and concerns that are coming up, we can offer our clients and customers certainty: we have no plans to change our credit policy, we will stick with what we have done in the past and we will work with our customers to make sure they come through this cycle in a strong position.” New Europe-wide banking
regulations come into force in 2008, requiring banks to factor risk into the pricing of their loans, and to maintain capital levels based on their operational strength. Manus said the existing strength of LTSBS in both areas means it would be able to pass on the benefits of its commitment to quality to customers. “Over time, you will start to see a differentiation between banks, as quality becomes much
AMIDST ALL THE UNKNOWNS AND CONCERNS THAT ARE COMING UP, WE CAN OFFER OUR CLIENTS AND CUSTOMERS CERTAINTY
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02 Housing CONTACT THE TEAM MANUS FULLERTON Director of Corporate and Commercial Banking tel: 0131 260 0520 e-mail: manus.fullerton@ lloydstsb.co.uk MIKE MULLINS Area Director – Commercial Banking East tel: 0131 260 0800 e-mail: mike.mullins@ lloydstsb.co.uk
Lloyds TSB Scotland is working in local communities to support affordable housing and social regeneration projects
Tenant James MacMichael (seated) with (from left) Andrew Clark, Alex Condie, Graeme McDougall and Bryan Hay
RONNIE MCINTYRE Managing Director, Commercial Finance tel: 0141 331 6351 e-mail: ronnie.mcintyre@ ltsbcf.co.uk ANDREW STARK Area Director – Commercial Banking West tel: 0141 341 5963 e-mail: andrew.stark@ lloydstsb.co.uk MARK PRENTICE Head of Corporate Banking tel: 0131 260 0216 e-mail: mark.prentice@ lloydstsb.co.uk DOUGLAS REID Head of Treasury tel: 0131 260 0517 e-mail: douglas.reid@ lloydstsb.co.uk
Please contact us if you would like this in Braille, large print or audio tape www.lloydstsb.com/corporatemarkets www.lloydstsb.com/business
In the Kingdom, your home is your castle CASE STUDY LTSBS has engineered funding packages that will see hundreds more new affordable homes built in the Kingdom of Fife. The latest agreement involves Fife Housing Association, with LTSBS making £17.5m available for a further 375 homes that will be built for rent in various parts of Fife. The association is currently building homes in Kirkcaldy and
Dunfermline, and intends spending a total of £32.5m on new housing and associated work over the next three years. Fife Housing Association and its partners – Glen, Kingdom and Ore Valley – are working with Fife Council to plan and implement a
£175m programme to build a total of 1967 affordable new houses for rent and shared ownership. Graeme McDougall, Relationship Director for LTSBS, said: “Fife Housing Association has demonstrated over the past
LTSBS NOT ONLY DEMONSTRATED ITS UNDERSTANDING OF THE ISSUES, BUT WAS ABLE TO TAILOR ITS OFFER TO MEET OUR REQUIREMENTS Alex Condie, Fife Housing Association Chairman
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• Lloyds TSB Bank plc. Registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no. 2065. Telephone: 020 7626 1500. Lloyds TSB Scotland plc. Registered Office: Henry Duncan House, 120 George Street, Edinburgh EH2 4LH. Registered in Scotland no. 95237. Telephone: 0131 225 4555
• Lloyds TSB Bank plc and Lloyds TSB Scotland plc are authorised and regulated by the Financial Services Authority and signatories to the Banking Codes.
• Commercial Finance is a trading name of Lloyds TSB Commercial Finance Scotland Limited, Henry Duncan House, 120 George Street, Edinburgh, EH2 4LH, a wholly owned subsidiary of Lloyds TSB Scotland plc.
• Lloyds TSB Development Capital Limited is a member of the Lloyds TSB Group. Registered in England and Wales, number 1107542. Registered office: 45 Old Bond Street, London W1S 4QT
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• Growing your Business is published quarterly by Connect Communications, Studio 2001, Mile End, Paisley PA1 1JS. Tel: 0141 561 0300. Fax: 0141 561 0400, on behalf of Lloyds TSB Scotland plc
Economic fortune determined by trio FORECAST THE economic climate facing Scottish businesses this year will be determined by the complex interplay of “the three great imponderables” of interest rates, exchange rates and oil prices, according to Douglas Reid, Head of Treasury at LTSBS. After the dramas of last year, when the US dollar fell substantially against the pound, oil prices soared to $100 a barrel and
Fast Fact • LTSBS believe that economic conditions in 2008 depend on interest rates, exchange rates and oil prices.
fallout from the US sub-prime mortgage crisis fed a credit crunch, Douglas said there was now a “new tone” to some elements of the UK economy. “By most measures, the economy is still performing well. Despite the media attention the credit crunch received, it has not yet had a huge impact on the overall UK economy. However, the situation is still a long way from being resolved. The markets need to know who is holding the debt and it will probably take a couple of reporting seasons before that becomes apparent. “It is possible general borrowing will become more expensive. We have had quite a long period of cheap credit, and I think the regulators will move to make sure that the correct amount of risk is
priced into any lending, so you may well see the price of credit moving up.” However, as the cut in December indicated, Douglas said we’re not moving to a high interest rate environment. “I think we will see the Bank of England cut the base rate again in early spring, with another cut in the second quarter. By the end of 2008 I expect we
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Development 03
LDC opens first office in Scottish Capital Happy returns for Hillcrest IN ANOTHER initiative to support the social housing sector LTSBS has recently helped one of Scotland’s largest Housing Associations – Hillcrest, in Dundee – restructure its financing requirements, and with partner banks, put in place a £70m deal for future developments. Graeme McDougall said: “Hillcrest is celebrating its 40th anniversary this year, and we
have been its financial partner since 1994. We are delighted to have agreed a new facility that will support the association’s exciting future plans.” Angela Linton of Hillcrest said: “We are very pleased with the outcome. We achieved our goal to streamline borrowings, reduce margins and put in place funding for our development programme over the next three years.”
10 years that it is an effective and dynamic provider of affordable housing and, as an organisation, it reflects the bank’s own focus. We are committed to supporting regeneration projects and to our wider strategy of corporate social responsibility.” Association Chairman Alex Condie commented: “We met with a number of potential funders before deciding that LTSBS most closely matched our requirements. “It was necessary for us to
ensure that the bank understood the nature of our business and could work closely with us to advance our programme of work. “While our plans are very detailed, they are also affected by all sorts of unforeseen difficulties. LTSBS not only demonstrated its understanding of the issues, but was able to tailor its offer to meet our requirements in a very competitive environment.”
EXPANSION LLOYDS TSB Development Capital (LDC) has continued its growth by opening it’s first Scottish office. The operation will be based in Edinburgh and headed by Craig Armour (pictured above).
WE NOW HAVE A LOCAL PRESENCE TO FOCUS ON THE SCOTTISH MARKET AND HOPEFULLY STIMULATE ACTIVITY Grant Berry, Managing Director LDC
The move supports LDC’s aim of being the UK’s most active mid-market private equity house in the £5m to £250m deal range with the largest regional network. LTSBS has grown its corporate and commercial business very significantly, delivering an increasing range of specialist products and services within the Scottish market. LDC brings a further specialism to the services available locally from the Lloyds TSB Group. Grant Berry, Managing Director, LDC, said: “We’ve been
seeing increasing deal flow from Scotland and we now have a local presence to focus on the Scottish market and hopefully stimulate activity. We’re delighted to have recruited such an experienced and successful individual for our senior director role.” Craig Armour, 46, was a partner in private equity firm Penta Capital for seven years, specialising in mid-market deals in the consumer and business services sectors. Prior to that he was a director of merchant bank Noble Grossart, where he advised a wide range of private and public companies. He said: “The LDC business model combines an equity investment range of £2m-£100m with dedicated local resources, providing a great opportunity for Scottish companies. “We want LDC to be a natural financial partner for ambitious management teams and we want to work with local advisers.” To contact Craig Armour, please phone on 0751 509 6526
Private banker appointed PRIVATE BANKING
will be looking at a base rate of between 5 and 5.25 per cent, so that reduction in base rates will somewhat offset any rise in the cost of credit.” He said he did not expect much movement in the dollar/sterling exchange rate, as the US economy continued to deal with the effects of the credit crunch. Although Scottish exporters would continue
to be hit by the weak dollar, the exchange rate situation did have the benefit of shielding the UK economy from the full impact of the high oil prices. Although there may some easing in oil prices, Douglas said they would not drop back to historical levels. “We might just have to get used to paying more for our energy.”
LTSBS now offers a bespoke service for customers who want international and offshore banking advice. Euan Milne recently took up the role of International Private Banking Manager for Scotland. Based in Aberdeen but working across the country, Euan offers a tailored service for customers needing this specialist assistance. Euan said: “I’m pleased to be able to help customers with
requirements ranging from personal transactional accounts, through international mortgages to a full private investment service. For many, accessing international banking services can be quite daunting, so having the reassurance of face-to-face contact is a real benefit. “We also have access to international tax planners as well as Lloyds TSB Group’s own specialists in Geneva, Zurich, Dubai, Monaco, Gibraltar, Miami and Latin America.”
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January 2008 • www.lloydstsb.co.uk
04 News
Comedy duo accept audience gong Still Game stars receive top accolade at the star-studded 2007 BAFTA Scotland Awards, sponsored by Lloyds TSB Scotland
Ford Kiernan and Greg Hemphill accept the award at Glasgow City Halls
BAFTA SCOTLAND AWARDS James McAvoy, Lorraine Kelly and Robbie Coltrane – the stars were out in force for the BAFTA Scotland Awards in November. This marked the second year of a three-year partnership, with the bank taking the BAFTAs out to its network of 185 branches across Scotland with the LTSBS Audience Award. LTSBS has established a very strong reputation for supporting the arts in Scotland and by supporting BAFTA Scotland it is investing in a vibrant Scotland – one which serves its citizens, attracts visitors and enhances its reputation on a world stage. The eventual winner of the audience award was BBC Scotland’s ‘Still Game’.
Actress Jane McCarry (right) also took honours for the popular comedy by winning the Best Television Actress Award for her portrayal of Isa Drennan, Jack and Victor’s interfering neighbour. James McAvoy added a touch of
Carbon reduction pledge
Hollywood, collecting the BAFTA for Best Film Actor for his role in ‘The Last King of Scotland’. Star guests in the audience included ‘How To Look Good Naked’s’ Gok Wan.
WOMEN’S EVENT
Pic courtesy of London 2012 Games
ENERGY CONSUMPTION LLOYDS TSB Group has set itself a target to reduce its carbon emissions by 30 per cent by 2012 (based on 2002 levels). This is an important date, timed to coincide with the bank’s sponsorship of the most sustainable Games yet, being held in London. In addition, Lloyds TSB aims to make its operations carbon neutral by reducing energy consumption and travel, by continuing to buy green energy and by offsetting any remaining emissions. Lloyds TSB already has a good track record of progressively reducing its environmental impact. In the last five years,
Glitz, glamour and business...
The site of the London 2012 Games will become a sustainable resource for the city after the Games
the bank’s carbon footprint has been reduced by almost 36,000 tonnes. LTSBS Chief Executive Susan Rice is keen to bring the 30 per cent reduction target to life in Scotland and has been looking at how the company can reduce its Scottish footprint. She said: “We’ve been looking at how we do things in our sites, from increasing the use of conference call facilities to
recycling plastics and drinks tins and lowering energy consumption by switching off lights and PCs at night.” Susan is also a member of the Climate Change Business Delivery Group, a group of leading business men and women who are working together, alongside government, to help reduce carbon emissions from Scotland’s business community.
ON 5 December, 200 of Scotland’s leading businesswomen gathered at the Scottish National Portrait Gallery to celebrate Scottish women and LTSBS’s sponsorship in the world of film and television. Susan Rice, Chief Executive of LTSBS, said: “Being able to bring busy businesswomen together in such a relaxed environment is a wonderful opportunity for us. “With more than 11,000 women starting up in business in Scotland in the last year*, this is an extremely important arena for us and we are determined to get it right.” As the UK’s number one bank for business start-ups†, Lloyds TSB is ideally positioned to capitalise on these opportunities. * Source: www.scottishbusinesswomen.com †
Source: TNS YEQ3 2007 GB start-up survey