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Handelsbanken - A brand new type of Bank has sprung up in the UK

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A bank, new to Britain, is expanding rapidly across the UK.  Its name is Handelsbanken and it is from Sweden. However, it is about to open its 150th branch in the UK.

Decision Making

Decisions on lending are taken centrally at head office where all the clever people are at the major British banks. The best brains at the bank are all assembled there and the best risk assessment IT systems are all there too. That’s where the major British banks make all of their lending decisions. OK, they don’t know the people they are lending to but that is more than made up for by the magnificent and expensive software systems and the First Class Honours graduates and 2:1 graduates all assembled in one place together in a Centre of Excellence. They give them incentives to sell mortgages and when times are good they make a whole shedload of money. Everyone is happy. The clever people all make money and the banks make a load of money.

Changing the Paradigm

However, this upstart bank has come along and changed completely the paradigm of banking. It’s a new way of thinking. They have identified a gap in the market.

They are letting the local branch managers make all the decisions about lending. Imagine that?

There is nothing to stop high street banks letting their business branch managers make local lending decisions, the Financial Services Authority has said.

Simon Lodge, head of the bank’s southern region, said FSA officials had visited the bank last year to learn more about its lending practices, which see managers given the discretion to approve anything between 75pc and 90pc of lending locally. Mr Lodge said: “The FSA are fully aware of our model and our credit structure and how we do things. They are fully aware that this operates across the globe and we have been doing it for a long time. And we have had no feedback whatsoever that they are uncomfortable with it.”

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