The future is bright for the regional Banking & Finance markets, says Andrew Madden – head of the Banking & Finance team at Gateley
London has long been recognised as a key driver of the UK economy, but the UK regional financial centres are an increasingly important part of the UK financial services market and there are a number of developments in the banking sector over the next few years that will serve to increase the significance of regional centres such as Birmingham, Leeds, Manchester and Nottingham.
The requirement, imposed by regulators, that UK banks separate their retail operations into businesses that are ring-fenced from those investment banking operations which are perceived as being more risky, is to be completed by 2019 but UK banks are already well advanced with their planning.
The most high-profile to date has been HSBC Bank, which has already announced its plans to locate the headquarters of its "ring-fenced" retail bank, HSBC UK, to Birmingham. This will involve the migration of over 1,000 senior leadership and management roles in the bank from London and follows Deutsche Bank relocating many of its back-office roles into the city.
The flotation of Clydesdale Bank, currently scheduled for spring 2016, will provide a platform for growth of strong regional banking brands and will be followed by the launch of Williams & Glynn as a separate bank, divested by RBS, later in the year which will continue the trend. The last few years has also seen the growth in the UK of so-called “challenger" banks. The likes of TSB, Metro Bank, and Shawbrook have brought greater diversity to the UK regional lending market. These are generally funders seeking opportunities in the regional mid-market, rather than investment banking, and who look largely to the regional financial centres for their professional support.
These are moves that are likely to be followed by others as funders continue to look for opportunities to drive down costs and as our regional cities chase down opportunities to entice large corporate headquarters to move away from London. This will require regional banking lawyers, used to working with funders mainly on transactional lending and recovery, to increase their skill base to be able to service the regulatory needs of funders.
Whilst London will remain the financial centre for investment banking and international finance, we are likely to see accelerated growth in the regional finance markets based around core cities such as Birmingham, Leeds, Manchester and Nottingham. There has always been a strong regional practice in lending and recovery, but we are likely to see increasing levels of expertise in areas, such as banking regulation and head office support that may historically have been provided in the City.
All of this means that the opportunities for development of banking and finance lawyers in the regional market are brighter now than they have ever been. Firms such as Gateley Plc who have a strong regional network in these core cities supported by an established national brand can offer a wealth of opportunities for the right people.
