There’s much more to the financial services industry than London
THE FRUITS of Britain’s banking industry stretch well beyond the Square Mile and Canary Wharf. This morning, for example, I will be speaking to members of Manchester’s business community. When it comes to picking impressive banking hubs, you may not think of the northern city that gave us Thomas de Quincey, Emmeline Pankhurst and the Gallagher brothers.
So you may be surprised that more than 10,000 bankers are based in central Manchester alone. Across the North West, the industry contributes £15.2bn to the local economy – 12 per cent of regional gross value added. The region holds particular expertise in asset and wealth management, as well as insurance, legal and accountancy services.
“Bully for Manchester”, you might think, as you read Morning Wire nearly 200 miles away. But the geographical breadth of banking and financial services is one of its strengths. Despite the financial crisis, the British banking industry remains one of the country’s truly global industries. It is the UK’s largest source of export revenue, generating £63bn, or 3 per cent of GDP, in 2012. London’s Canary Wharf and the City are the apple of New York’s eye.
But this sector is creating jobs and growth across the land. Over 14,000 people are employed in banking in Leeds. Deutsche Bank has big operations in Birmingham. Citi works out of Belfast. This is not to mention the prospering financial centres of Edinburgh and Bristol. Of the 451,100 employed in banking, over two thirds are located outside London.
And when you drill down into the local benefits the industry offers, it helps to explain the real national value of banking and financial services to Britain.
Local businesses in Manchester are profiting from having a substantial banking sector on their doorstep. A recent survey showed bank lending to small to medium-sized enterprises (SMEs) in the North West was £11bn in 2012, £2bn of which went to Manchester. And these businesses receive more lending relative to their turnover than firms in London, the South East or the East of England.
Across the UK, gross lending to SMEs is now growing at 11 per cent a year, with Manchester’s burgeoning digital industry a leading recipient of bank finance. Take Great Fridays, an agency specialising in strategies that maximise a client’s digital offering. A substantial Enterprise Finance Guarantee loan helped the owners pursue their growth plans and add to the 34 jobs they had already created.
British and foreign investors have poured over £3.5bn into making Manchester the digital capital of Europe. Their decision was made easier and more attractive by the presence of a mature but local financial and professional services market.
Major employers like BNY Mellon and the Royal Bank of Scotland invest in offices and job creation in Manchester precisely because they can specialise within banking.
So just as there is a lot more to Manchester than footy and Britpop, there’s a lot more to Britain’s banking industry than London.
Anthony Browne is chief executive of the British Bankers’ Association.