Allanson sees opportunities in ‘refinancing bubble’
RECENT turbulence in both the Eurozone and the US – which has hit share prices and confidence – has yet to be felt in the North West banking market.
This is according to Dave Allanson, area director for Lloyds Bank Corporate Markets in Manchester, East Lancashire and East Cheshire, who says the local market is becoming more competitive.
He told TheBusinessDesk.com “Markets have bene turbulent for some time, and while it’s early days in terms of the recent falls, companies are finding that they can’t put investment decisions off forever.
“It’s still very tough out there – and I wouldn’t pretend otherwise, but there are some businesses who are doing well, ones that probably took difficult decisions early and did not prevaricate and saw that the environment was going to be tough.”
Allanson’s team has reported strong growth in the first half of 2011, with a 15% year-on-year rise in new banking relationships, and a pipeline well ahead of last year too.
Among the newcomers was Luxfer, where Lloyds was part of a three-bank syndicate on a £110m refinancing deal with the Salford company.
He said: “We were delighted to get involved with Luxfer as they were not a customer before. I think we are in a bubble of refinancing and we are seeing companies that may have come out of a difficult time and are now casting their net to look for banking partners, and that presents us with an opportunity to get involved with some of these businesses.
“There is not a lack of liquidiity for the right deal in the market place – and it’s increasingly competitive for the right deal, and that’s how it should be as everybody is looking to write quality deaks and that is driving prices down.”
Lloyds says it has noticed strong deamnd from larger firms for cash management products as many are sitting on cash – the number of deposits taken by the bank trebled in the first half of 2011 compared with 2010.
Despite the downward revisions for UK growth, Allanson is cautiously optimistic that deal flow may pick up as investment decsions are taken out of storage.
He added: “Many of the new packages we have arranged this year have included acquisition facilities. Those customers in a position to seek out debt to support growth are keeping their options open, so while organic growth remains a priority for all, mergers and acquisitions are likely to increase into 2012 as businesses aim to enter new markets or consolidate their existing position.”
