Bank of Ireland Corporate Banking’s head of Origination Kenneth Brady talks about the changing banking landscape in Ireland and supporting businesses through the pandemic to better times ahead.
There is no doubt that the Irish banking landscape is going through profound and turbulent change. First there is the departure of Ulster Bank from the marketplace. Second there’s the acquisition of KBC Bank Ireland’s assets and liabilities by Bank of Ireland.
For Ken Brady as Head of Origination – another term for new business development – the challenge is to marry the needs of new customers in the corporate banking space with those of existing and established customers as the bank transitions to its goal of being a digital relationship bank. It’s about affirming stability and trust but also accentuating innovation.
“Selecting the right banking partner is key to the success of any strategic plan because that partner will understand their business very well and be there to support future expansion”
Corporate banking is very much about serving the needs of large and mid-sized organisations and as much as the twin-vortex of the departure of both Ulster Bank and KBC from the marketplace sends shockwaves through the banking community, Brady says that it’s the businesses themselves that need to focus on their future needs.
“For SMEs and larger corporates, these changes should generate discussions within their own businesses about their funding requirements and banking partner. It’s a call to action for businesses to think about their needs and who can best service those needs.
“CEOs and CFOs would have a strategic plan for the next three-to-five years and as part of that plan may have identified a funding requirement that goes beyond the cash resources of their own business and therefore would require a funding partner.
“Selecting the right banking partner is key to the success of any strategic plan because that partner will understand their business very well and be there to support future expansion. And that’s the fundamental role of the bank – we want to develop new relationships and learn about their business so that we can be a supportive partner as they go about their journey of growth.”
An example of a large Irish-based business that recently decided to refinance its banking relationship in advance of Ulster Bank’s exit from the Irish market is Thorntons Recyclcing. Thorntons Recycling, founded in 1979 is a family owned waste management and recycling business, employing more than 550 staff and servicing over 75,000 Household customers and 5,500 Commercial customers in Dublin, Meath, Kildare and Wicklow.
“The relationship we built with the Corporate Banking team was key to our decision to move to Bank of Ireland,” said Gary Brady, CEO of Thorntons Recycling.
“Ken and his team were highly responsive throughout the transaction process, invested the time to truly understand our business, and provided a seamless transition for us. We are delighted to have Bank of Ireland’s support as we embark on our next phase of growth and sustainability.”
Knowing your customer
Ken Brady, head of Origination at Bank of Ireland Corporate Banking
“For many of our customers, the Covid-19 crisis gave them a period to re-examine their own businesses and the direction they are heading, whether they want to grow organically or through acquisition. I think they’ve used the time wisely”
Brady said that it’s being easily accessible to prospective customer , having the ability to understand and anticipate the strategic vision of new customers that makes a fundamental difference.
“Businesses in the corporate banking space will be reasonably sophisticated in terms of understanding their financing needs and optimising the capital structure through debt or equity. They’ll know the form of funding they wish to use and if it’s debt, then the market in Ireland for established businesses is mature and a very competitive market.”
The departure of Ulster Bank from this market will be meaningful. “Ulster Bank was a third force in the corporate banking market. The market will remain competitive because the two large players are seeking to grow.”
And what will this mean for customers in the space? “The landscape is undergoing a lot of change. Borrowers need to understand their requirements and feel confident in approaching a bank and outlining their needs.
“Where we come in on the new business side of corporate banking is that we’re a dedicated team who are experts in supporting businesses moving from one bank to another and structuring solutions that meet their needs. The key is to invest time with new customer’s to fully understand their business. That’s our role and our focus and that investment of time is what new customers need from us”
Brady accepts that an initial anxiety for corporate banking customers switching bank is whether their new bank understands their business.
“Our role is to demystify the engagement and the connection with the bank. The information we require is most often similar to that which is used by the management team to run their business this includes trading accounts, an understanding of the operating business model, the strategic plan and the terms and conditions and security of any existing transactions. The key is to take the pain out of that initial information gathering phase.
“We would then come up with solutions that fulfil the requirement they have and offer the benefit of our experience in completing over 50 new transactions in the last number of years. The corporate banking experience is very much relationship-driven, and it can be as simple or sophisticated a process as is determined by the company’s financial needs. Our job is to make that process as quick, efficient and as cost-effective as possible.
“Bank of Ireland as a full-service bank, serving all sectors, have the right platforms to make it as seamless as possible.”
When faced with adversity, Brady says Irish businesses can weather the storm in an adaptable way and the pandemic proved this once again. “For many of our customers, the Covid-19 crisis gave them a period to re-examine their own businesses and the direction they are heading, whether they want to grow organically or through acquisition. I think they’ve used the time wisely. We are already seeing good momentum in terms of new customer transactions and activity for the first two quarters of this year, which is certainly generating acquisition led investment and funding requirements for those businesses.
“This is also about innovation and products. From a Bank of Ireland perspective that means improvements in our digital platforms and products that we can offer in the ESG (Environmental and Social Governance) space. These themes are very current now but will become even more important in the future.”