Lecturer Profile – Steve Pateman
Steve Pateman joined Santander in June 2008 and became Executive Director, Head of UK Banking in March 2012, with his appointment as a Member of the Santander UK Board confirmed in June 2011. Steve’s responsibility now covers Retail, Corporate, Commercial and Business Banking, incorporating all of Santander UK’s channels under his remit.
Steve was previously with NatWest and RBS where he was CEO of Business Banking, Managing Director of Commercial Banking and Managing Director of Corporate Banking. He also worked on a variety of financings, restructurings, capital market and equity issues during his time in NatWest Markets where he specialised in the leisure and retail sectors.
The Opportunity to Create a Sustainable Recovery : A Breif Review
The lecture was focused on the role small and medium-sized businesses (SME’s) and social enterprise can play in creating a sustainable economic recovery. It was actually quite refreshing to attend a lecture on the financial crisis that wasn’t solely focused on the behaviour of the banking industry and the gloom and doom that may or may not lie ahead.
Instead Steve Pateman advocated a re-think of traditional models of financing SME’s and social enterprises by abandoning a ‘one size fits all’ credit model in favour of ‘Relationship Managers’ – yes actual human beings who could work with businesses so as to understand and manage risk specific to individual business models.
The changing shape of business in the UK has made traditional ‘one size fits all’ methods of managing risk redundant and arguably harmful to the economy. This was illustrated by considering one of Santander’s own clients ILoveMusic.com – an internet based company which amongst other things provides individualized digital duke box contracts to hotels. At the time of the start-up ILoveMusic.com had no fixed assets and found it increasingly difficult to finance the business venture. Yet after securing finance with Santander the company went on to make a 2 million pound turnover. This finance would not have been possible without the input of Relationship Managers who were able to work with ILoveMusic.com to acquire an understanding of the business model and the risks associated with the value of an unproven technology v. the possible cash flows.
The lecture also highlighted how gradually the banking industry has lost its understanding of the type of support that makes SME’s successful and has instead focused on how many products (i.e. derivatives) they can sell to SME’s for profit focusing on short instead of long term gain.
Net lending to SME’s is on the decline yet, as articulated in the lecture , providing sustainable access to finance for SME’s is essential for the UK economic recovery. This is because of the role of SME’s in driving growth and private sector jobs. For instance approximately 2/3 of private sector jobs are created by ‘Gazelle’ SME’s – yet the UK Government and the Banking industry as a whole has been shy to provide the support necessary to transform such SME’s into Global Business Leaders.
Overall I found the lecture to be really interesting and thought provoking. It was interesting to hear the perspective of a distinguished individual in the Banking Industry and his view on creating a sustainable economic recovery . I though his ideas on the role SME’s and social enterprise could play in the economic recovery to be innovative and fresh.