‘Irish SMEs have shown remarkable resilience’

From the pandemic to inflation and now climate, Irish SMEs have been able to adapt and thrive, says Bank of Ireland Business Banking’s head of New Business Origination Brian Walley.

More than two-thirds of the Irish business economy workforce – that’s around 1.6m people (CSO) – work for a small or medium-sized enterprise (SME). This cohort can rightly be described as the backbone of the economy and the first to bear the brunt of challenges like pandemics and cost of living crises but also to gain through opportunities in the form of new technology and sustainability.

It goes without saying that the employers of this cohort need a banking partner that can help them to deftly manoeuvre through times of challenge and opportunity with grace and aplomb.

“This year, the Bank celebrates its 240th anniversary and while we now live in a different world, one thing that hasn’t changed is that banking is still a relationship business”

For Brian Walley, head of Origination at Bank of Ireland Business Banking it is about taking a holistic approach to the ebbs and flows of the life of a business.

“SMEs are the driving force of the Irish economy employing around 70% of all people currently working in Ireland,” Walley agreed. “In Business Banking, we see our role as supporting these SMEs in facing the challenges and capitalising on the opportunities that arise. We focus on building long term relationships as opposed to standalone transactions. Nothing gives me greater pleasure than working with some of our SME customers who may have grown from a micro enterprise with handful of employees with simple banking needs to global companies requiring complex financial solutions.”

Holistic solutions

Man in navy suit.

“Most SMEs do not have sustainability targets but for those who do, they are closely aligned with their companies strategic measures”

Walley said it is about being there for the tough times but understanding and appreciating opportunities these firms are trying to grasp.

“Over the long term we understand there may be bumps in the road and that’s why it’s so important to build a strong banking partnership. What businesses need from a bank will very much depend on where there are in their life-cycle and as a full service bank, we ensure we provide holistic solutions to our customers.”

Walley explained Bank of Ireland Business Banking is the largest lender to SMEs in Ireland with around 280,000 business customers.

“This can range from sole traders and small firms to large businesses. Earlier this year, the Banks corporate and markets division was expanded to include Business Banking in a newly formed Corporate and Commercial Banking Division which means that all business customers regardless of scale are served by one division. My brief is to build relationships with SMEs (and their advisors) who may not currently be customers of the bank in order to support their growth ambitions and make it as easy as possible to do business with us.

“This could be through supporting management buy-outs, acquisitions, working capital solutions, business expansion, property acquisition, refinance. We have a team of experts with decades of experience across multiple transaction types and sectors who will invest the time in understanding the business and their particular banking requirements and very importantly are easily accessible to prospective customers and their advisors.”

The key is to be in step with various trends in business sectors. For example, Bank of Ireland retains a team of sectoral experts in agriculture, food, health, hospitality, manufacturing, retail and technology to ensure opportunities are understood and businesses in respective sectors are supported. Not only that but relationship managers on the ground ensure that a partnership approach guarantees success.

This partnership approach has proven crucial through the challenges faced by businesses in recent times.

“Irish SMEs have shown remarkable resilience over the last few years adapting to the impacts of the pandemic, supply chain issues, the war in Ukraine, inflationary pressures, staffing and skills shortages and emerging technologies. Our skilled relationship managers continue to work closely with our customers to support the specific needs depending on their circumstances. From engaging with SMEs, we know from a recent survey that ESG/Sustainability issues are a key focus for SMEs currently. 70% are concerned with sustainability. 62% see it as a risk and 73% see it as a critical success factor for their business.

“Most SMEs do not have sustainability targets but for those who do, they are closely aligned with their companies strategic measures. To support our SME customers, Bank of Ireland has recently launched its ‘Green Business Hub’ which provides useful information and points to a variety of supports that are available to make businesses more sustainable.

“Business Banking has also added to the team of sector experts with a new Head of Sustainability for Business Banking. In 2022, Bank of Ireland was first to market with the Energy Efficiency Loan Scheme in partnership with the Strategic Banking Corporation of Ireland (SBCI) and a new Growth and Sustainability scheme (also in partnership with SBCI) is currently under development and is expected to be launched in the next few weeks.”

Scaling up

As well as tackling the climate challenge and adapting to new technologies, the world is changing and shifts in manufacturing and supply chain practices as well as e-commerce and Brexit mean that Irish businesses need to scale globally through exports to the Eurozone and beyond.

To achieve this, Walley says, SMEs require a relationship with their bank that embraces and embodies the very spirit of partnership.

“Scaling requires investment,” he explains. “Whether a business plans to grow organically through product/service/geographic diversification or through acquisition, businesses will need to invest. Key to a successful scaling strategy, is assessing the current capabilities and financial strength of the business and identifying what steps need to be taken to enable and support the growth of the company. Those may include bringing in expertise, investment in technology and processes and of course additional funding if the requirement goes beyond the available cash reserves in the business.

“A high level of planning will be required and engagement with your bank and/or other funding partners as early as possible in the process is critical.”

Looking to the future strong partnerships between banks and their SME customers will matter more than ever.

“The last decade has presented numerous challenges to SME’s such as Brexit, Covid 19, and the war in Ukraine to name a few, however businesses continue to adapt and grow. Over the next decade, as we face further challenges, the needs of our customers will change and we will adapt to meet those needs in order to continue to support our SME customers,” Walley concluded.

“This year, the bank celebrates its 240th anniversary and while we now live in a different world, one thing that hasn’t changed is that banking is still a relationship business.”

John Kennedy
Award-winning ThinkBusiness.ie editor John Kennedy is one of Ireland's most experienced business and technology journalists.