The Co-operative Bank is looking to grow its presence in the SME banking market, with the appointment of Donald Kerr to the new role of managing director of SME Banking.
Mr Kerr brings experience as head of SME Banking at CYBG, a role he has been in since August 2016. While there, he worked on growing the group’s SME capability and improving its digital offer. He was also in charge of developing CYBG’s business case for the forthcoming Capability and Innovation Fund initiative. Prior to this, he held managing director roles in Commercial Finance and SME Banking at Lloyds Banking Group.
The move follows the Co-operative Bank’s announcement that it will apply to the Incentivised Switching Scheme. The bank has also expressed interest in the Capability and Innovation Fund. Both schemes are made available by RBS to boost competition in small business banking as part a restructuring plan agreed along with the bank’s bail-out by the UK Government in 2008. In order to wave its rules on state aid, the European Commission asked RBS to give some of its branches and business customers to other banks. The Banking Competition Remedies, an independent body, will oversee the distribution of funding.
The Incentivised Switching Scheme, which makes available a £775m pot of cash, will encourage SME customers to switch from RBS to rival banks. The Capability and Innovation Fund comprises a total of £425m, which will be granted to banks to develop and improve the financial products and services available to SMEs.
Mr Kerr will commence at the bank in early 2019, following regulatory approval, and will report to chief executive Andrew Bester. The bank already serves 90,000 SMEs, 700 co-operatives and 5,000 charities. It offers three business accounts, including a Community Directplus Account, which offers free banking services to eligible registered charities, credit unions and community interest companies.
The Co-operative Bank also has a partnership with the Federation of Small Businesses (FSB) and offers a bespoke FSB Business Banking Account. Since 2016, the bank has been funding the Hive, a co-operative development programme run by Co-operatives UK which provides business support for people looking to start or grow co-operative or community enterprises, using a mix of online resources, training and advice.
Commenting on the appointment of Donald Kerr, bank chief executive Andrew Bester said: “I am delighted that Donald has chosen to join the Co-operative Bank at this important point in our development.
“Our heritage in providing banking services to small and medium sized businesses together with our recognised strong service culture provides us with a great platform. We want to significantly build on that and drive greater competition in the market using the strength of our ethical brand, which is the reason many of our 90,000 SME customers choose to bank with us.
“Donald’s experience in leading successful business banking operations, and insight into the challenges and opportunities SMEs currently face will be valuable as we increase our focus and build our position in this market and I look forward to working with him.”
Donald Kerr added: “I’m delighted to be joining the Co-operative Bank as it looks to grow its position in the business banking market. The need for greater competition in the market is well documented but should at last become a reality with the help of the RBS remedies package. That’s great news for Britain’s SMEs and I believe the Bank’s distinct ethical position means it has a strong role to play in delivering on that.”