Banks urge businesses to turn new confidence into investment
- Credit: Joel Chant
Regional banking chiefs have issued a rallying call to businesses urging them to 'convert confidence into investment' to help generate tangible business growth.
With Britain forecast to have the fastest growing economy among G7 countries, attention is now focusing on how that will affect investment decisions among firms which will be crucial in underpinning any sustainable upturn.
Mark Amis, area director for East Anglia in the mid markets team at Lloyds Bank Commercial Banking, said current business behaviour suggested that firms remain cautious.
And while many of the region's firms are already planning investment by engaging bankers and advisors around ways in which they can deliver organic and acquisitive growth throughout 2014 and beyond, he believed that some will only benefit from the continued recovery by shifting their strategies.
However, the HSBC 'Business of Growth' report said 2014 will mark a turning point for ambitious businesses in the region, predicting an increase in fixed investment in physical assets including machinery, premises and stock.
The bank said it was earmarking an extra £300m of lending to small and medium-sized firms in the East of England – part of a £6bn nationwide package of extra funds across its regional networks.
Mr Amis said: 'Confidence amongst our region's corporates is unquestionably growing, supported by improving conditions in employment, the manufacturing and services sectors, and the broader economy. Nationally, we increased our net lending to mid-sized businesses last year by 3pc against a market that declined by 6pc.
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'We also achieved 4pc growth in cash deposits on balance in 2013 nationally, which clearly shows that cash is still on balance sheets and not yet beginning to be invested. On a local level here in East Anglia, we increased net lending to mid-market corporates by 10 percent during 2013.'
HSBC said that a significant amount of the lending for its small to medium-sized enterprise customers was earmarked to support growth.
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