The banks are coming back

Almost two years ago I got up at some ungodly hour to head into Melbourne’s CBD and eat those awful breakfasts with nasty coffee that city hotels love to serve.

My task that morning was to join some fellow entrepreneurs – running much bigger companies than SmartCompany – and talk to NAB’s private business customers about the state of the economy and what we were doing to adapt.

We know now that we were smack bang in the middle of the GFC. But at that breakfast in August 2008, there was still a mood of optimism. So much so that when I warned the business owners in the room of what was coming, I was accused of creating the bad news and of being part of a media beat up. I remember looking around that room full of tables of medium sized business owners flanked by a few NAB bankers, and wondering how many of those business owners would still be drinking that awful coffee with their bankers in two years time.

But rather than express that sentiment which would have guaranteed a public lynching, I told the business owners and bankers some happy news. I said in a few years time SmartCompany would be reporting that things are getting better – and when we did, no one would believe us either.

Well, here is some good news. Believe it if you want. I have caught up with my inside bank sources – who originally told me that the lending taps were shutting off when the banks PR machines were spinning with the message it is lending as usual – and it looks like things could be about to get better.

Apparently what is happening now is this: the blokes on the front line are keen to lend. The banks have too much tier one capital and while still fixated on savings, know they have to start working that money again by lending it to business.

But there are a lot of people running around the business units with “risk” in front of their titles including risk officers, risk strategy, risk capability, risk capacity planning and so on.

“They don’t do anything,” one banker sniffed, “but go to committee meetings and sing Kumbaya.”

To make that tension worse, there is a growing sense that the “other banks” are taking the brakes off faster and could be stealing ahead.

“Our brakes are off but the accelerator is not yet down,” this banker said. “We are going to miss the boat if we’re not careful.”

What does it all mean? Well, it is still hard to get money with the risk controllers in charge. Accountants report there is no change as yet.

But it is coming. Which means you should be prepared now if you want to borrow money, refinance or get more finance with less conditions.

By the end of this year a threat to change banks might actually have some grunt. Here’s hoping.