WHILE business owners believe 2015 will be a year of economic growth they remain cautious of potential “left field disruptions” such as the unstable Eurozone and the impact of a hung parliament should a definite result not be reached in May’s general election.
Having successfully navigated their way through the recession, Irish men and women who own and manage businesses across Britain are confident of their prospects over the coming 12 months, explains Gerard O’Keeffe, Head of GB Business at Allied Irish Bank.
But it is a “cautious” optimism, the Co. Cork native, who has been with the British arm of the Irish bank since 2006, told The Irish Post this week.
“From an overall business perspective, all the indicators are that the economy is going to perform well this year,” he said.
“Certainly everybody we are talking to is feeling that. But they also feel that there is this kind of residual uncertainty that things can come from left field and disrupt the economy,” he added.
“It’s those things that people have no control over,” he explained.
“So there is a feeling that the Eurozone is in a much weaker position than the British economy, which is a concern for people.
“Also the election is coming this year and there are a lot of different concerns about what could happen there. I don’t think people are really sure of what the outcome might be, but there is concern that the idea of a hung parliament would mean nothing happens for a period of time.
“Ultimately, all businesses would prefer a result rather than no result.”
Having launched its first British branch in Kilburn, north London in 1970, AIB is celebrating 45 years serving the Irish business community in Britain this year.
While it has developed significantly to also support native British businesses over those decades – currently Irish firms make up just 25 per cent of AIB GB’s portfolio – it retains many of the Irish clients that shaped the fortune of the bank on these shores, and it hasn’t forgotten its roots.
“AIB was originally formed in Ireland in 1966, when three banks came together,” explains O’Keeffe.
“Just a few years later, in 1970, it set up its first operation here in Britain, in Kilburn, and effectively became the banker to the Irish community and to Irish business.
“And as the Irish entrepreneurs around that time became very successful - largely speaking in north London in the construction industry - and got more confident, they started setting up their own businesses and we branched out with them.
“We started doing business with the businesses they did business with and so we grew with them. We started branching out to places like Glasgow, Birmingham, Manchester and Liverpool, places where the Irish were, and while they got more successful we got more successful. So we are very heavily linked to the development of the confidence and the whole entrepreneurial culture that grew up around those Irish people in Britain from around the 1970s.”
When talking about those original Irish clients on which AIB grew in the early days, O’Keeffe mentions well-known names of Irish industry in Britain such as the Clancy and Carey families, many of whom he claims remain loyal customers.
“We still have some of our early customers, many who are still among our biggest and best clients,” he said.
“But they have changed over the years and while they are still generally family businesses at heart they have grown. A lot have grown very significantly,” he explained.
“In many cases you now have the children or grandchildren of the founders in significant positons within the business and it’s great to see those types of business being so successful and being acknowledged for being so successful in the wider British business community today.
“Really they are British businesses with an Irish flavour now.”
Thanks to the work of its GB operation, AIB is also being recognised as an industry leader in British banking, with numerous awards on its mantelpiece won both pre and post financial crisis.
Yet for them their core skills – of offering business banking built on strong relationships with their owner manager clients and the unique position they hold to connect British and Irish trade – remain at the top of the list of their most valuable assets.
“Today we are primarily a business bank but we don’t compete everywhere, we look after what we call owner managed businesses,” O’Keeffe explained.
“These are businesses that are often family type businesses run by people who are not salaried employees.
“They are people that stay awake at night worrying about their business, they have an emotional attachment to their business and so they like to have a banker that they can have a long term relationship with, who really understand their business.
“So in the past year we have refocused our business even more on relationship banking for those types of customers. We would have fewer customers per relationship manger that any of our competitors would and that is a conscious thing, as we recognise that this is what these businesses need. They need a personal touch backed up by professional expertise and we take the time to understand those businesses, know what’s important to the owners and advise them and help them around a range of things – not just when they want to review their overdraft or something, it’s much more frequent interaction than that.”
He added: “Another aspect of our focus is on British Irish trade, which is an important area for us. There are more Irish directors than any other foreign nationality in British business and we have a team here specifically focusing on the links between trade across the two islands – for Irish businesses looking to Britain and also British businesses looking to Ireland.”
And that focus is set to continue across 2015, O’Keeffe admits, while the bank sets about reasserting itself in the British market.
“We are doing a lot of business at the moment, and we did over £1bn in business last year, so we are looking to increase that in 2015 but we are also going to be more on the front foot this year in terms of making our presence known,” O’Keeffe confirms.
“We feel our niche, in relation to owner managed business, is an area where we have a particular foothold and an area that is an important one in the British economy, which probably doesn’t get the attention that it deserves. But it is a sector with an exciting year ahead,” he adds.
“The owner managers of our businesses are telling us they are confident about the economy here and they are optimistic about their own business prospects this year.
“They see growth coming from the domestic economy and they don’t see access to funding as a big concern to the growth they are going to get over the next year or so.
“They see that as coming from the growth of the economy and the investment they have put into their businesses in recent years. So it’s an interesting time and an exciting time to be in business here after what has been a difficult few years.”
