Banking on the future

Regional law firm, Birketts LLP, surveyed over 100 businesses across the East of England during July and August focusing on the commercial relationships with banks and the impact the recession has had in general on their business. The survey was completed by Senior Managers from different industry sectors.

“As advisors to businesses needing practical and timely advice, we needed to establish facts concerning our local economy and get some clear indicators as to the areas which give cause for concern” said James Austin, Head of the Corporate Team in Ipswich.Respondents commented on the changes in relationships with banks following mergers and nationalisation. Although 79% said that consolidation hadn’t directly affected them, 63% felt that consolidation wasn’t a good thing. Their concerns ranged from changes in personnel and inconsistency with communication to increased fees and less competition.

The newest recruit to the banking team, partner Steve Clark comments, “In my 22 years of experience working as a banking lawyer, mainly in the City, the level of upheaval experienced by the banking sector in the last two years has no comparison and one might have expected economic circumstances to have led to a greater breakdown in principal funding relationships than it in fact has. Just under half of respondents to our survey (46%) reported no increased strain which is testament perhaps to some hard work on the ground in maintaining relationships.”

Overall the results are encouraging and give an optimistic forecast for the region. A resounding 88% of respondents are optimistic or very optimistic about the health of their business over the coming 12 months. On the subject of staffing 79% are not considering any reductions in staff. Proceeding with caution, the majority of businesses have little planned by way of increasing investment in any of the cost centres (premises, IT and R & D). The exception here is marketing, but even then the number of businesses expecting to invest more in marketing (47%) only marginally outweighs those who aren’t (46%).

Whilst no one, even the most qualified commentators, can predict when the recession will truly be over, our survey suggests that the region is bearing up well and there is certainly optimism and a feeling of ‘glass half full’ in many sectors. This coupled with other regional ‘good news’ stories such as an increase in house prices and a record year for the region’s tourist industry, should give encouragement and reason not to cancel the office Christmas party after all.