We also have clients, particularly within the construction and services management sectors, that are worried about how leaving the EU might impact their ability to source skilled labour from the EU. Were the UK to adopt more stringent border controls or, perhaps a points-based system, accessing that labour could become a challenge. These businesses will need to think about adapting their recruitment strategies going forward in order to minimise disruption.
While some specific consequences of the referendum outcome are now beginning to crystallise, it is probably the general uncertainty that is giving companies the biggest challenge at the present time. For those companies that regularly enter multi-year contracts with their buyer and supplier base this could prove more challenging for example. A contract signed today could become very unpalatable in the future, not least because of the underlying currency values.
Such uncertainties may weigh on trade over the long-term, but the immediate impact on trading conditions has so far been rather muted. A lot of our clients are telling us that their buying and selling relationships have returned to normal quite quickly – although we have seen a minor decrease in volumes across the clients we serve, possibly linked to an element of ‘wait and see’.
What role can Lloyds Bank play in helping clients face these different challenges and seizing the opportunities presented by the UK’s decision to leave the EU?
In the lead up to the referendum, Lloyds Bank focused on understanding the impacts of both possible outcomes for both the bank and our clients. Most important to us was ensuring we would be able to continue serving our clients even in a business environment characterised by considerable uncertainty. From our perspective, nothing fundamental has changed at this point. We are continuing to grow in the UK, but are also following our clients internationally through our overseas offices in the US, Europe and Asia. Lloyds Bank is still there for its clients as a solid banking partner over the long-term; we remain resolute in our determination to help our clients prosper globally.
With our long pedigree in supporting international trade, Lloyds Bank is well-placed to help clients mitigate the risks of buying and selling in new markets, and provide them with tools to minimise their working capital cost. We support a broad range of clients, from small-to-medium sized enterprises through to major global corporates and financial institutions. To meet clients’ needs, we have a similarly broad range of products, from simple documentary collections through to bespoke structured trade solutions. A good example of how we can help our clients is through the Letter of Credit (LC), which we are able to offer in over 90 countries through our international network of partner banks. The LC is a great tool because it can be used by the exporter as a source of risk mitigation and liquidity, but also by the importer to ensure supply performance.