Welcome to ‘Interview with an entrepreneur’, a series where we talk to entrepreneurs and industrialists and delve into their business mind. Today we interview David Oldfield who is the Managing Director Commercial of Lloyds TSB Bank Plc is a retail bank in the United Kingdom. It was established in 1995 by the merger of Lloyds Bank, established in Birmingham, England in 1765 and traditionally considered one of the Big Four.

David Oldfield

What does your average workday consist of?
I’m new to my current role as Managing Director for Lloyds Banking Group’s Commercial business. We provide support to the UK’s small and medium sized businesses that are crucial, of course, to the economy of the UK. We’ve been at the forefront of supporting our customers whether its through start up’s or helping businesses grow and we’re showing net lending growth of 4% in the first half of this year against the backdrop of a market that’s gone backwards by 4%. These are early days for me so I am spending my time meeting colleagues and customers. I’m typically “out and about” in the business across our main UK sites a couple of days a week.

Do you believe the typical ‘small business’ customer has changed due to the recession?
There’s no doubt that many small and medium sized businesses have found it tough in the past couple of years. Sadly, some have failed as we see through an increased number of insolvencies but, importantly, the great majority have been resilient and survived and continue to provide crucial services to their customers. In fact fewer have failed than in previous less deep recessions. So, I don’t believe the typical customer has changed but we have seen many businesses tighten their belts, reduce their running costs and become more cautious about investing. In our recent Business in Britain report which surveys 1800 UK businesses there was evidence of a lift in confidence despite tough economic conditions – but we’re not out of the woods yet.

How does the bank view risk, in light of the precarious nature of the economy?
Lloyds has a prudent view of risk generally and I think that’s important as we need to play our part in helping businesses prosper – but safely. We adopt a through the cycle approach to supporting businesses – because we are cautious in the boom times, we are able to continue to support customers where viable in the harder times. It’s true that the UK economy remains fragile and many of our customers expect demand to continue to be weak in the months ahead and we need to take a sensible view of how we provide support. Lending money to customers who won’t be able to repay is nobody’s interests. We say yes to eight out of ten customer lending requests and we are growing our net lending levels (new lending fewer repayments) year on year as we recognise that’s crucial to helping Britain get stronger.

Does the bank really support entrepreneurial ventures, given that they are by their nature high risk activities?
Most new start-ups don’t borrow to begin with, as many start from home and use savings and capital to build a business with capacity to repay first. We need to take a balanced view of risks and reward and try and do the right thing for new and existing customers at the same time. New ventures are inherently more risky and a fair proportion don’t succeed but since January 2010 Lloyds Banking Group has supported 292,000 business start-up and we continue to approve 8 out of every 10 loan requests overall. So, yes, I believe we are doing our bit to support new business ventures. And it isn’t always bank debt that’s the best form of funding. We work closely with other providers of finance, such as business angels – individuals who invest equity in a new business and also help them plan and manage their growth.

How do you see your industry developing over the next 3-5 years?
The banking industry has been through a tough period and we operate today against a backdrop of continued economic uncertainty and lack of public confidence. Lloyds though is a retail and commercial bank. Our heart is in local communities and we are committed to supporting UK households and businesses as we know just who crucial that support is to the future of the UK economy. Certainly, banks must work hard to restore public faith and trust. Fortunately, we have wonderful staff through the country and the great majority of our customers tell us that we serve their needs extremely well.

How do you measure the level of your success in the community you serve?
We’re able to measure very tangibly what we do for our customers. Whether it’s net lending figures, attracting customer deposits or providing a range of products and services, we can see clearly how well we’re performing against our industry. That external focus on looking after our customers better than our competitors has become much more acute in recent times and that has to be a good thing for competition. More generally, we do support communities up and down the UK. There have been great examples in the past year or two of how we’ve used our partnership with the London 2012 Olympic and Paralympic Games to help create a sporting legacy. Through our National School Sports Week we have helped 8,000 school children take part in sports they wouldn’t otherwise have been involved with, of course, the powerful impact of the Olympic Torch Relay across the UK, in which Lloyds TSB was one of the three presenting partners, can only help to inspire youngsters’ interest in sports. On the business side, 370 of my colleagues are acting as volunteer mentors to mostly new and prospective entrepreneurs and we have recently recognised twenty student and graduate entrepreneurs through our Lloyds TSB Enterprise Awards.

What three pieces of advice would you give to a young entrepreneur starting out today?
Come up with a great idea, do your homework, create a proper business plan, talk to your bank manager – and go for it!