FOR a time, the talk around Clydesdale Bank focused on whether the brand would cease to exist after it was taken over by National Australia Bank (NAB) in 1987, but that speculation now appears in the past as the brand grows in confidence and stature.
Clydesdale took over the high-profile sponsorship of the Scottish Premier League from its bigger rival, Bank of Scotland, at the start of the current football season. This has given a boost to staff morale as well as raised the company's pro
file.
As Steve Reid, retail banking director at Clydesdale, explains: "This is our flagship sponsorship. It's been good for staff after our well-documented period of change in recent years. Doing something on this scale caught a lot of our employees by surprise, as they maybe didn't think we were in a position to do it. It's a clear sign we're moving onward and upward."
Clydesdale has good reason to want to spread the word that it's riding high, given the beleaguered state of much of the UK banking sector in the middle of the credit crunch and in the aftermath of the Northern Rock debacle. In fact, its sister brand in the NAB family – Yorkshire Bank – has benefited by winning customers in its north-east of England heartland from its soon-to-be-nationalised local rival, according to Reid.
Clydesdale has kept its nose relatively clean by staying away from higher-risk mortgage lending that led Northern Rock into problems. "We have no exposure to subprime lending and have never targeted that part of the market, so that puts us in a very good position," says Reid. "Why go after subprime when we're doing pretty well in other markets?"
Without going near such high-risk sectors, Clydesdale has managed to grow its mortgage book by 90 per cent between 2004 and 2007. In its most recent annual results – for the year ended 30 September, 2007 – its mortgage lending totalled £15.6 billion, representing a 19.1 per cent increase in 12 months.
Clydesdale has 153 branches – 151 in Scotland and two south of the Border. When Yorkshire is included in the equation, the branch numbers go up to more than 340, employing 4,000 staff in the UK, including 300 people in contact centres in Clydebank and Kilmarnock.
Reid has spent his entire working life in financial services, having started at HFC Trust & Savings, part of HSBC, before moving to Woolwich and then on to Clydesdale, which he joined as head of retail banking four years ago.
His role has expanded since and he oversees a range of functions from branches to wealth management through its independent financial advisers and financial planners, and its Financial Solutions Centres across the UK and, therefore, he has an in-depth knowledge of the banking sector and is prepared to take on the big boys.
"We have to see the likes of HBOS and RBS as competition as we're in the same markets. We can match them in terms of product and pricing, although we don't tend to try to be as price-led as HBOS, in particular.
"We're much more focused now on differentiating ourselves through the customer experience. We still haven't got it 100 per cent right, but we've made significant strides."
Over the past two years, NAB has invested £100 million on renewing the technology that services the branches and they have been given a makeover. An intensive mystery shopping exercise has also been carried out. "We got under the skin of what if feels like to be a Clydesdale customer and deal with the staff in our branches. The feedback is improving all the time," adds Reid.
This seems to be paying off as Clydesdale is doing well in terms of acquisition of customers from bigger banks who want a more personal service.
"Our smaller size is an advantage as we can move more quickly than other banks when it comes to product development," Reid claims. "For example, because of the fluctuation in stock markets last year, we knew customers would be looking for some form of guarantee.
They would want exposure to equities without the risk. So we quickly brought a new product to market that benefits from stock-market growth with a capital guarantee."
Reid says he is always looking for ways to diversify and, as part of this, the bank last year launched its "Buy Abroad, Feel at Home Service" for people wanting to purchase properties in Spain.
Reid is relatively optimistic, despite the global fallout from the US subprime crisis. He concludes: "I don't think there will be a big slowdown, although there is danger of doom and gloom turning this into a self-fulfilling prophecy."
While Clydesdale may be regarded as a minnow alongside the likes of HBOS and RBS, it seems to be punching above its weight.
The full article contains 818 words and appears in The Scotsman newspaper.
