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Big four banks face challenge from Aldermore

THE regional director for Aldermore in Scotland has declared his ambition for the challenger bank to provide the full suite of banking services to customers north of the Border.

EXPANSION PLANS: Aldermore's regional director for Scotland Andrew Curry.
EXPANSION PLANS: Aldermore's regional director for Scotland Andrew Curry.

The Aldermore operation in Scotland has focused largely on providing invoice finance facilities for small and medium-sized enterprises since coming into being four and a half years ago.

Aldermore, which launched here following the bank's acquisition of Cattles plc in 2009, has since grown its loan book to Scots SMEs to £20m from £8.5m in that time.

Its client roster has also risen to 150 from 100 businesses.

Regional director Andrew Curry, who joined Aldermore three and a half years ago, said that the bank's activities in Scotland also extend to some residential and commercial mortgages.

But in time he hopes the Glasgow-based division expands to cover the gamut of operations the bank offers around the UK, including savings and asset finance.

Speaking shortly before the bank celebrated its fifth birthday, Mr Curry said: "Although Glasgow is primarily the invoice finance piece, we do have residential and commercial mortgages as well.

"And I would like to think that longer term the intention would be to build a team operating out of Glasgow that does the whole thing."

Aldermore deals with Scottish companies with turnover ranging from £250,000 to £20m, typically in "sell and forget" businesses such as recruitment, haulage and human resources.

Providing both factoring and invoice discount services, it steps in to fill the credit gap where supplying companies face waits of up to 70 days for invoices to get paid.

Mr Curry, who leads a team of 15 staff in Glasgow, said the area of invoice finance has grown to become a "very sizeable market" since it first emerged in the 1960s, noting that Aldermore's competitors range from fellow independents such as Metro Bank to offshoots of high street banks.

He said there are "fewer players" and fewer opportunities" for invoice finance players in Scotland compared with London and the south-east of England, chiefly because there are not as many businesses. But he insists the Scottish market has its advantages.

Mr Curry said: "The difference is that there are more competitors [in London] as well.

"When we go out and look at a business we are much more likely to do the business than one of our competitors in the south of England."

Aldermore was one of several challengers created to capitalise on the disillusionment felt by many consumers and business owners towards the major banks caused by their role in the global financial crash, and also because of issues such as the PPI (Payment Protection Insurance) mis-selling scandal.

Mr Curry, who set up an invoice office for Royal Bank of Scotland 20 years ago, said that unpopularity continues to linger.

He does not deny that Aldermore has benefited from that sentiment, adding that it has also gained while mainstream banks face criticism for not lending enough to SMEs.

However, he emphasised the need for the industry as a whole "to get back to a position where the general public trusts the bank again".

Asked whether consumers and SMEs have enough choice when it comes to banking, he said pointed to the emergence of Aldermore, Metro Bank and, more "cynically", the relaunch of TSB and Williams and Glyn by Lloyds and RBS respectively, and added: "I think there will be more.

"And I don't think that is a bad thing.

"And I think that maybe it is what will help restore some of the confidence [that has been lost], if people have more choice.

"There is a certain amount of apathy - it is difficult to move your bank account isn't it?"

On the wider performance of Aldermore, Mr Curry highlighted its progress by noting that the bank had booked profits of £22m last year and increased its lending to SMEs to £1.8bn, up 64% on its previous year. He said "the bank is going places".

Mr Curry added: "I don't think you will see an Aldermore bank on every high street corner, because we are keen to avoid the branch network set-up.

"We are very keen here in Scotland to give SMEs the access they need to working capital."

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