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October 2015
SUPPORTING BRITISH BUSINESSES
IN NUMBERS
5%
YEAR-ON-YEAR NET GROWTH IN LENDING TO SMEs
£1.5bn
NET INCREASE IN LENDING TO SMEs YEAR ON YEAR
76,000+
START-UPS SUPPORTED SO FAR IN 2015
24,000+
JOBS PROTECTED THROUGH OUR BUSINESS SUPPORT UNIT IN 2015
8 out of 10 LOAN AND OVERDRAFT REQUESTS APPROVED
Our year-on-year net growth in lending to SMEs was 5% at the end of September 2015, while across the industry growth was flat. In our Helping Britain Prosper Plan we have pledged to grow our SME net lending by at least £1 billion every year until the end of 2017. In the 12 months to September 2015 we provided £1.5 billion in net lending to SMEs. Since the start of 2011, we have grown our lending to SMEs by 24% whilst the market has contracted by 16%.
HELPING UK EXPORTS We are working with UKTI, through a strategic partnership, to support the UK’s export ambitions and provide insight, support and introductions. As part of our SME Charter we have also pledged to help boost exports by growing our provision of trade finance by 25% to UK business.
DIGITAL INVESTMENT We are investing £1 billion in digital and mobile services for our customers, to give them more choice in how they bank with us. Our business customers are embracing digital services – over 90% of all payments are made online and over 68% of our business customers now bank digitally. Our 5-star rated Business Banking app allows our customers to manage their finances when they are on the move. We are working with the Government to improve digital skills for individuals and small businesses – we are the only bank to sit on the Government’s Digital Services Inclusion Delivery Board. We are recruiting 20,000 Digital Champions and working with Go ON UK – the Digital Skills charity – to highlight the benefits of online skills. Our Lloyds Bank Business Digital Index 2015 showed that under a quarter of SMEs lack basic digital skills. We have launched a range of online toolkits which are available to anyone at lloydsbank.com/businesshelp
OUR FINANCIAL SUPPORT FOR SMEs We have launched a new current account to provide small business customers – those with an annual turnover of less than £1 million – with a simpler service, including free online and electronic transactions. Customers with an annual turnover of more than £1 million can pay a simple, fixed monthly fee to cover their day-to-day banking transactions through our Monthly PricePlans. Unlike many other banks, local decision-making is an important part of the service that we offer our customers. Our most senior managers can renew loans up to £1 million, and approve new lending of up to £500,000 to existing customers at their own discretion. We approve eight out of ten loan and overdraft requests – a rate which is independently verified and in line with our long term average. We offer 18 months free day-to-day banking for start-ups. Our private equity division, Lloyds Development Capital (LDC), plays a crucial role in supporting SMEs. In the 12 months ending September 2015, LDC invested £400 million in 19 companies. We are committed to providing alternative sources of finance for our customers, including asset based lending, trade finance and community finance. We have a partnership with Greater London Enterprise
MANUFACTURING Lloyds Banking Group continues its support of the UK manufacturing sector. In 2013 we made a commitment of £1 billion in funding support for the sector each year until 2017 and have already met the £1 billion target for 2015. We have committed to a £5 million investment in the Lloyds Bank Advanced Manufacturing Training Centre at the Manufacturing Technology Centre, Coventry. The Centre will help to train 1,000 new manufacturing apprentices, in order to help address the skills gap across the sector in the UK. In partnership with the University of Warwick, the Warwick Manufacturing Group, the Engineering Employers’ Federation and the Manufacturing Technologies Association, we have trained more than 300 managers across the UK in manufacturing awareness to help enhance the support we offer manufacturing businesses. through which we are providing funding of £5 million to lend to micro businesses across the Capital. Since the launch of this London Loan Fund in April 2014, 121 micro businesses have accessed £2.4 million, creating or protecting over 330 jobs. We are taking part in a range of other Government schemes designed to help businesses get access to finance. We are continuing to offer competitively priced lending to SMEs in all sectors for the life of their loans through the Funding for Lending Scheme. During the second quarter of 2015 Lloyds Banking Group grew its net lending to SMEs by £527 million, more than any other bank participating in the scheme. Since the Bank of England started reporting SME lending in April 2013, we’ve grown our SME lending by £3.3 billion in support of British businesses. We continue to support clients with loans through the Enterprise Finance Guarantee (EFG) Scheme, where the Government provides a guarantee to the
bank when a client lacks the necessary security for a normal loan. We have supported over 6,440 EFG loans, worth more than £544 million – around 23% of all loans granted through the scheme so far.
INDUSTRY INSIGHT AND ECONOMIC ENVIRONMENT Our bi-annual Business in Britain report (July 2015) shows that businesses remain confident of growing sales, orders and profits in the next six months and expect exports to improve. Our recent Housebuilding report shows that although the sector is positive, there is an acute skills shortage within the industry which is hindering efforts to alleviate the housing shortage. Our recent report into Food and Drink shows that producers in England and Wales will create more than 73,000 new jobs by 2020 and are confident about future growth.
OUR BROADER SUPPORT FOR SMEs Through our SME Charter we have made a series of pledges to help support our customers. These include: • A commitment to help 1,000 start-ups become £1 million turnover businesses within three years, contributing at least £1 billion to the British economy. • A commitment to support 10,000 businesses become more resilient by 2020,
helping them to take action on sustainability. Using our free online tool businesses can learn about the benefits of sustainability and build an action plan to drive change within their business. • Our own Appeals Pledge, which goes beyond industry agreed guidelines, and commits us to look at 90% of customer appeals within 15 working days, and make a goodwill payment wherever a decision is overturned in a customer’s favour. Lloyds Banking Group has created the £100 million Housing Growth Partnership, with £50 million funding from the Government, which will be used to help smaller builders invest in new projects and develop their businesses. We have launched a £500 million fund for farmers in case of any delay to their basic payments at a challenging time for the sector. We have been leading the Business Finance Taskforce mentoring initiative and now have more than 450 mentors across the UK – more than any other bank. We are supporting our business customers through our network of over 2,000 customer facing staff, as well as through our internet site which receives more than two million views a month. Our Business Support Unit (BSU) is continuing to help businesses in financial difficulties. In the three months to September 2015 it helped more than 1,200 businesses onto a sounder financial footing and protected over 24,000 jobs.
THE COST OF BORROWING The absolute cost of borrowing for Lloyds Bank customers has more than halved since 2007. During September 2015, 85% of Lloyds Banking Group’s new variable rate term lending to SMEs was at an interest rate margin of less than 4% over base rate. We have promised that arrangement fees on loans and overdrafts will not be greater than 1.5% of a customer’s facilities (subject to minimum fees for small facilities). We only seek security where appropriate, on a case by case basis, reflecting risk and type of facility.
