Allanson calls for change in mindset for growth

ONE of the region’s top corporate bankers says some company bosses may need to change their mindset if they and their businesses are to make the most of opportunities to grow.

Dave Allanson, area director at Lloyds Commercial Banking for Manchester, east Lancashire and east Cheshire, believes there is something of a disconnect between feeling more confident about growth, and actually committing to investment.

Citing the results of a survey taken at the bank’s Big Picture event late last year, which was attended by more than 200 business leaders, and showed that more than 70% of respondents felt more optimistic about future growth prospects, while 80%planned to finance expansion in the next year, he said in reality many executives are more cautious in their approach.

He said: “Confidence amongst our region’s corporates is unquestionably growing as we enter 2014, supported by improving conditions in employment, the manufacturing and services sectors, and the broader economy.

“While we continued to increase lending to businesses in the region in 2013, we are currently looking at a trend of around 9% in cash deposits on balance with us nationally, which shows that cash is still on balance sheets and not yet beginning to be invested.”

Though some businesses are looking at acquisitions, others will only benefit from the continued recovery by shifting their strategies, he argues.

“Up until recently finance director and treasurers’ strategies were focused on conserving cash and managing expenditure in the downturn. Now they need to focus on expansion to take advantage of recovery opportunities in 2014. That’s a big change for many.

“Working capital management is one obvious area. Companies need to move from fighting inefficiencies for short-term gain in the downturn, to finding working capital enhancements that improve the long-term health of the company, and its competitiveness in the recovery.”

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