Paul Simon talks to banker Steve Elsom about rebuilding reputations, backing business and Suffolk’s future prospects
Paul Simon talks to Steve Elsom, of Lloyds Bank
WITH this month marking the start of the financial year, it’s appropriate that my interviewee is a banker. Although Steve Elsom is a ‘lifer’, having been in the sector for over three decades, he defies the two great stereotypes of his trade – Captain Mainwaring cautious, or ‘barrow boy’ flash.
Given his background as a talented amateur footballer – originally from north London, he remains an avid Spurs supporter - for Steve Elsom it’s all about team work, getting the best out of the players, and being tactically sound. Even his job title, regional director, SME Banking, East of England, sounds like a solid midfield line-up.
“There’s a huge difference between management and leadership. I continually remind my directors not to get too distracted and embroiled by the ‘management’ tag. Leaders should provide direction, clarity and purpose.
“If leaders display these three traits consistently and with real enthusiasm, insight and passion, they will get what they need to get. Too many ‘leaders’ fall back into management and start looking down at their desks, paper and laptops, as opposed to looking up and out at the world around them.” A world very different to the one he started out in.
“I came up through the Lloyds heritage and was heavily influenced by a couple of our esteemed CEOs and chairmen of the time, like Sir Brian Pitman and Sir Jeremy Morse. As young, aspiring bankers we would hang on to their every word - they were iconic leaders of their time, the early to mid-1980s, when Lloyds was looked upon as one of the most revered brands on the High Street.” But surely the reputation of all banks and bankers has been totally degraded by the events leading up to the financial crisis of 2008? Steve recognises that the sector as a whole made mistakes, but defends his own reputation and that of Lloyds.
“I accept that there is a perception that banks were ’bad for business’ during that period and whilst personally I never had anything to apologise for, I can understand the frustration that was being felt in many parts. The sector had got itself into a mess globally. I regret the way that it ended up being reported through the media and the hysteria, the frustration and the tensions that then hung off the back of that.
“I’m not going to defend the indefensible and I’m not going to speak for any other bank. I can only speak for Lloyds. But it wasn’t a very nice time for many of us and indeed some of my team admitted that they were embarrassed to say they worked for a bank because of
the media campaign that was being waged. That was unfair. The global issues that had contrived to provide a perfect storm, weren’t ‘founded’ in the high streets of Suffolk, but they had a massive consequence on confidence and credibility right across the banking sector.”
What about the specific claims that banks deliberately closed down sound businesses and asset-stripped them? “I don’t believe that was the case at all across the Lloyds’ landscape, and we continued to engage with and support clients who were facing financial difficulties, and who may have been wondering which way to turn.
“Our credit policy didn’t change and we were proactive in being there for our clients, through the cycle. We were applauded for that by journalists, political commentators and MPs alike, in terms of our consistency of approach. I recognise that perceptions can be powerful, persuasive and potentially, divisive, so the banks are working very hard at re-building the trust of clients.” Steve’s current role is to ensure that strong working relationships are in place between the bank and its 25,000 clients across the six counties in the East of England.
“Businesses need more than just a ‘good old reliable Captain Mainwaring’ relationship manager. They demand someone who can provide quicker responses, have an awareness of the business and of the sector, who can signpost opportunity, identify challenge and who can add value to the business.
“Our Helping Britain Prosper manifesto is at the heart of what we do and I am constantly probing and determining whether we are delivering on that manifesto and what more we can do to support our SMEs. I need to make sure our message means not just maintaining a momentum in their business but helping them to survive what are quite tough times for some sectors, such as retail.”
Steve has a real sense of empathy with the challenges facing local business folk. “Running a business can be a lonely existence. Owners often need someone to talk to and have that chance to look up and out and to see the benefits of working ‘on’ the business not just ‘in’ the business.”
He also tries to engage with businesses about the bigger issues facing them. “I spend a lot of my time out in the marketplace taking the temperature. Businesses tell me we could do with a bit more insight around what happens, for example, with a hard or soft Brexit.
“That’s a part of the role that gives me intense satisfaction. Banks have got to be visible, accessible and proactive when it comes to supporting businesses. Many owners put a shift in, get home at 9.45pm to make themselves a sandwich and turn on the news, and could be forgiven that we’re going to hell in a handcart, because it all sounds like doom and gloom.” Steve accepts that the business financing market is also more competitive, with new market entrants such as crowdfunding,
“Our Helping Britain Prosper manifesto is at the heart of what we do and I am constantly probing and determining whether we are delivering on that manifesto and what more we can do to support our SMEs”
funding circles and public sector grants competing with traditional lenders.
“But a business with a strong banking proposition and a strong relationship manager will always be in pole position, and I don’t see this dynamic changing dramatically during the next cycle.
“We work in collaboration with the local enterprise partnerships, and where some mezzanine finance or seed capital is required, we point them to local growth fund opportunities and, for start-ups, to Foundation East.” Steve suggests that the perceived greater level of due diligence carried out by the bank into a prospective client is to both parties’ advantage. “It’s not just about the amount of loan and the interest rate, it’s about understanding the business and its sector.
When it comes to Suffolk’s economic prospects, Steve feels that the centre of gravity out of London is moving eastwards, partly because of the 2012 Olympics and partly because of transport improvements on that side of the capital.
“All the rail terminuses now provide better services to the most easterly counties of England, so this has opened up a whole myriad of opportunity not just in commerce but in London money coming into the region.” But in order to lock in this momentum, Steve wants to see a much more co-ordinated series of strikes to attract inward investment – including improvements to our road and rail routes.
“I do think in terms of the vibrancy and future prosperity of the East of England, we need to keep beating the drum about opportunity, but by the same token we need our fair share of inward investment. We could all do with improvements to the regional infrastructure, including the A14 and the rail network.”
If in some fantasy world, he was handed the job as head coach of Suffolk, what particular changes would he look to deliver? “I think we need to be better at our brand management. Whenever I go overseas and talk about East of England few people know much about it outside of Cambridge. So do you call Felixstowe, East Cambridge? Do you call Peterborough, North Cambridge? If we did this, would we be flooded by inward investment enquiries and opportunities?
“The other thing we need to fix is east-west transportation. In other words, I’d like to see better links between Cambridge and Ipswich.
“If I want to encourage my players to move from Cambridge to Ipswich and don’t want them to drive along the A14, they will have to use the train. But this takes too long as there aren’t enough services per hour. So there is a question about the investment likely to be made into that particular route, not least with the opening up of the Cambridge-Oxford line.”
Steve’s own commitment to the region is unwavering. “We’ve lived in Newmarket for 15 years, a town where my parents moved to from London in the ‘80s. My dad was a butcher from the age of 15 and he rose to become regional manager for Anglia, so whilst it was a culture shock for him and my mum at the time, they headed north to Newmarket. Our kids have been educated here and I now feel part of the fabric that is the East of England.”
“We need to better at our brand management. Whenever I go overseas and talk about East of England, few people know much of it outside of Cambridge”
The Port of Felixstowe. Steve Elsom wants Suffolk ro bat the drum about what it has to offer. Photo: Mike Page / courtesy of the Port of Felixstowe
The region needs better east-west links between Cambridge and Ipswich
Steve Elsom wants to see improvements to road and rail routes.
Steve Elsom with Paul Donno at a Suffolk Chamber of Commerce Networking and Bank of England Update, at The Novotel Ipswich
Steve Elsom of Lloyds Bank.