Yorkshire Bank eyes corporate market

YORKSHIRE Bank has stated its intention to make a splash in the North West’s corporate banking market next year.

It follows a similar move by HSBC as banks with strong balance sheets seek to step into the gap left by weaker rivals.

Yorkshire Bank, part of the National Australia Bank-owned Clydesdale Bank, has traditionally focused on lending to small and medium-sized businesses and acquisition finance, but now wants to expand its remit to take in lending to large corporates with a turnover of between £100m and £1bn.

The bank’s North West regional director for corporate and structured finance Paul Shepard said he was now in the market for funding and refinancing deals.

The bank is willing to commit to straight loans and revolving credit facilities, either on its own or with other lenders. Its upper ceiling is expected to be £50m.

Mr Shephard said: “In the last 12 months the acquisition finance team has written £400m of deals in the North West and the Midlands. Now we’re building our corporate team. We want to support local corporates and put capital into local business.”

“There are still some very good businesses out there. Why should they suffer just because the banking markets are in disarray. For us it should be a strong year.”

The NAB’s UK operations have been less exposed to the banking crisis than some of their rivals. The UK business said it had strong tier one capital – a key measure of financial strength – at the height of uncertainty around the banks in october.

It ruled out dipping into the government’s £50bn recapitalisation pot, but it has not been immune to the downturn. In the year to September 30 bad debts rose 32% with business lending performing particularly poorly. Bad debts in the first half doubled compared with the first six months.

Mr Shephard added: “We can’t avoid bad debts. Everybody will see an increase as a result of declining conditions. In the local market our book is very clean at the moment.”