Member Article

Co-op: a jump into the big time

Alex Jackman, senior policy adviser at the Forum for Private Buisness, shares his views on the takeover of Lloyds branches by the Co-op.

The big business story of this week is the Co-op’s deal with Lloyds to acquire and takeover some 632 of their high street branches.

If this deal goes ahead it will see Co-op land a 10% slice of the UK’s high street banking pie. That’s a sizeable figure sure to afford them real clout as a mainstream lender. At present they have just 3% of the market – so it’s a jump in to the big time for them.

So just what could this mean for small business? Well, today the news landed that lending to SMEs in the first half of 2012 is down by a colossal £3billion – that’s an extraordinary large sum of money not going where it’s needed most.

It is also the solid proof confirming what our members have been telling us many months – and that is that the mainstream lenders are not splashing their cash. Certainly not to small businesses anyway.

So a new player such as Co-op getting a big leg up in to the high street retail banking sector could be a really significant development for small firms desperate for growth finance, and particularly for those looking to return to traditional relationship banking.

Could it even be the end for the ‘tick box’ lending criteria approach used by many of the main lenders today? We hope so.

Co-op is already a respected high street name with great ethical standards and credentials most other banks can only dream of.

If this deal goes through it could genuinely be a fresh new era for high street banking for SMEs - something we have long been calling for.

Co-op are big on fair trade, so the hope has to be that this ethos for doing right by their customers and suppliers shines through in their retail banking arm when it comes to small business lending.

This was posted in Bdaily's Members' News section by Phil Orford .