Net lending to businesses across the South West by its wholesale banking and markets division rose 18% last year, Lloyds Bank has said.
Clive Hetherington, the bank’s area director, said the figure was encouraging news for the region’s larger firms.
“After another challenging year, this result is a clear indication that South West businesses remain financially robust and are poised to take advantage of any upturn,” he said.
“There are relatively high levels of liquidity within businesses in the area, which is testament to the strength and foresight of the region’s management teams, and many are now in a good position to plan for growth.
He said, however, that business confidence in the region does not yet match the strength of underlying business health.
“Despite our increased lending to medium-sized businesses and the £74bn leant to smaller businesses under the Government's Project Merlin deal, confidence is still being knocked by the eurozone crisis,” he said.
Last year Lloyds was involved in a mix of corporate finance and refinancing deals in the region and the bank also witnessed a marked increase in the number of South West customers looking towards overseas growth, particularly in the US.
The bank’s specialist trade finance team anticipates an increasingly busy year as customers seek to take advantage of export opportunities, requiring bespoke trade finance packages and currency risk management advice.
On the back of this, the bank is also expecting continued growth in the food and agri-food sectors which play a key role in the region’s economy. The food and drink industry is the single largest manufacturing and retail sector in the South West accounting for 8% of all economic output and Mr Hetherington anticipates opportunities for export will only help to bolster this.
“We are pleased to have reported significant growth in 2011 including completing over 50 new deals, but we need to maintain this momentum into 2012,” he said.
“While the wider economic picture remains gloomy, it is pleasing that so far South West corporates are weathering the storm. I remain confident that the region’s natural resources and solid skills-base mean it is well placed to be a driving force as the country, eventually, undergoes economic recovery.”
