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Wales needs to develop a ‘strong national banking sector’, says global IT firm boss

03 Aug 2021 2 minutes Read
Money on a Welsh dragon

Wales needs to develop a “strong national banking sector” according to the boss of a global IT firm.

Askar Sheibani, the CEO of Comtek Group, which has its HQ in Deeside, argued that too much of the Welsh economy is “owned by foreign companies and investors”.

The IT and telecoms repair service entrepreneur suggested that investors should be encouraged to “invest in our local banks rather than outside Wales”.

The founder and Chair of Deeside Business Forum, who started his business in a garden shed, hit out at high street banks for “deserting towns and communities” and said small businesses are being “suffocated by not having access to finance”.

He argued that the answer is for Wales to grow its own National Development and Retail Community Banks.

In a column for The Leader, he said: “We have a pool of fantastic innovative small businesses that are suffocated by not having access to finance.

“Wales must build its own financial infrastructure with less reliance on outside organisations. Welsh Government must build a strong resilient banking infrastructure that supports only Welsh Businesses and Welsh communities.

He also said: “Throughout the world, National Development and Retail Community Banks have proven track records in making a major transformative contribution to their nation’s economic and social development.

“Unlike private banks that lend during the boom times and radically reduce their lending during economic crises, these banks lend much more in difficult times to save the nation’s economy.

“During the financial crises of 2008 and the recent pandemic, National Development Banks stepped in to increase their lending and support.”

‘Fortunate’ 

He added: “We are very fortunate in Wales that we have both Development and Community banks.

“The Development Bank of Wales and Banc Cambria (just launched) are supported by the Welsh Government.

“We should encourage Welsh investors, including the government and local authorities, to invest in our local banks rather than outside Wales.

“High Street banks are deserting our towns and communities in order to reduce costs and increase their massive profits for their predominantly overseas shareholders.

“Wales has been relying too much upon inward investment from overseas organisations. Too much of the Welsh economy is owned by foreign companies and investors.

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Leigh Richards
Leigh Richards
1 month ago

Hear hear 👏

#1Chris
#1Chris
1 month ago

I pretend no expertise about banking outside of my own accounts, but the more structures we have in place that are self governed, the smoother the transition when we free ourselves of the toxic union.

Roderich Heier
Roderich Heier
1 month ago

Didn’t Lloyds Bank start in Wales?

Dazplott
Dazplott
1 month ago
Reply to  Roderich Heier

There may be some Welsh connection but I think it was Birmingham. Incidentally, Lloyds Banking Group own the Bank of Wales brand, it having been absorbed into Bank of Scotland in the 80s.

Gill Jones
Gill Jones
1 month ago
Reply to  Dazplott

When I was in business in the 80s and 90s I used Banc Cymru, as it was known then, – local, accessible, human contact, brilliant and truly supportive service for SMEs. Alas it was swallowed up by Bank of Scotland! A huge loss for local business. Now we have no choice but the big boys and this needs to change. One tip if you’re a Welsh speaker do use the Welsh language telephone service with the big boys – you get a direct local telephone number, speak to a local human being (no pressing various numbers for various services) and… Read more »

Mandi A
Mandi A
1 month ago
Reply to  Roderich Heier

Started in Birmingham after Sampson Lloyd had to leave Wales for being a Quaker

Dafydd ap Robart
Dafydd ap Robart
1 month ago
Reply to  Roderich Heier

“David Jones, a farmer’s son, came into contact with the drovers whilst employed at the King’s Head in Llandovery and set up his own Black Ox Bank in Llandovery in 1799; the bank issued its own bank notes. The bank survived until 1909 when it was taken over by Lloyds Bank.”

(Wikipedia)

Tim
Tim
1 month ago

We say we want all these things, yet we keep installing Welsh Labour to power. Time to change the government first perhaps??

Mandi A
Mandi A
1 month ago

Couldn’t agree more Mr Sheibani. I have been campaigning for a Bank of Wales for many years but launched? Not yet I think, certainly not 10 days ago when I heard Mr Bird speaking about it. And launched with what funds, its own members’ funds? We need to see a big fanfare in the press when this comes live. At the moment, we only hear what is going on through Mr Bird’s blog which has no information on it other than that he became the Chair of Cambria Cydfuddiannol in 2019 or a Twitter page. Would that we had pushed… Read more »

Last edited 1 month ago by Mandi A
defaid
defaid
1 month ago
Reply to  Mandi A

“Launched” also struck me as rather exaggerated. On the other hand, the last 5 or 6 paragraphs in this WG statement by Ken Skates from 22 March bear up that optimism. It’s the most recent information I could find. I’m wondering what Vaughan Gething’s first statement will contain. Nation.Cymru?

https://gov.wales/written-statement-community-bank-wales-progress-update

Last edited 1 month ago by defaid
Gweirydd
Gweirydd
1 month ago
Reply to  defaid

That statement is atrocious, on so many levels.

defaid
defaid
1 month ago
Reply to  Gweirydd

Can you elaborate?

Gweirydd
Gweirydd
1 month ago
Reply to  defaid

Gosh, where to start. Why on earth, for example, does this bank need to be involved in mortgage lending?

The point is to inject new credit into SMEs, not to lend against pre-existing assets, or to make sure Mrs Jones can have a bit of a chat when she pays in her giro. They just don’t get it at all.

defaid
defaid
1 month ago
Reply to  Gweirydd

That’s fair comment. I’m happy to state I have absolutely no idea of the financial world but I imagine that a country’s first national bank should operate in support of the economy, particularly when there’s an element of partnership with the government. It does seem that Banc Cambria is aiming to do largely what the Post Office and credit unions already offer. Even so, if that is all it achieves, I still think having a genuinely Welsh bank is probably a good thing. (I thought your original comment was referring to the huge amount of waffle that preceeded the little… Read more »

Gweirydd
Gweirydd
1 month ago
Reply to  defaid

Sounds to me like it will be operating under the licence of an existing bank, so won’t be Welsh at all. The Welsh government could set up a fully independent Welsh bank for as little as £20m. A paltry amount. Alas, no vision, and no cojones.

Shan Morgain
1 month ago
Reply to  defaid

https://gov.wales/written-statement-community-bank-wales-progress-update Speaks at the end of Banc Cymru by the end of 2021. There’s also this https://www.csba.co.uk/region/wales-cymru/ But that one has nothing definite lots of hopeful waffle. Neither date any more recently than January 2021.

Mandi A
Mandi A
1 month ago
Reply to  defaid

Thanks for digging that out. UKGov protecting access to cash? they were hellbent on creating a cashless society. Perhaps someone should write to Mr Gething and enquire what the “commercial investment proposal” for Banc Cambria consisted of, why there has not been an open bidding process to provide a service as laid out in Ken Skates’ paper, and why constantly create new structures when established institutions such as the Principality Building Society are allowed to wither. Or why WelshGov is not engaging with Lloyds/RBS who own the Bank of Wales name. “I am delighted to announce that in January [2021],… Read more »

Mandi A
Mandi A
1 month ago

Is this not an opportunity for nation.cymru to act as a proper news service for Wales and get out and do some interviews with the leading thinkers and doers in Wales. Like Tim says, the same ideas go round for generations but nothing moves forward.

Gweirydd
Gweirydd
1 month ago

There’s no doubt we need small, community banks, to provide credit to Welsh SMEs. Unfortunately, regulation is at the UK level, is aimed at helping large banks, and makes it difficult for small banks to survive.

For small banks to work, we need banking regulation devolved and for the Welsh Treasury to be responsible for providing window guidance to Welsh banks, and lending against pre-existing assets (mortgages, basically) restricted to savings banks.

Of course, it won’t happen. Not least because even large banks are slowly being displaced by central banks and CBDCs. The system is becoming more centralised, not less.

Ex Plaid member
Ex Plaid member
1 month ago

Effective Venture Capital sector is nearly as/at least as/more important. Solves a different problem to banks who don’t lend to a start up business.

Needs to be outside Governemnt/council influence as they typically can’t find their backside with both hands when it comes to start up business.

Gweirydd
Gweirydd
1 month ago

VC nowhere near as important.

Mandi A
Mandi A
1 month ago

Don’t know why people are so down on VC. I worked with Welsh growth companies for some time and access to capital at the right moment was crucial. Banks were too shy, business grants had too many caveats and ran to their own timetables. Business ‘angels’ could make their own choices and take their own risk. I was hoping a Development Bank for Wales could take this role whilst being embedded in the community. Banc Cambria feels confused.

Gweirydd
Gweirydd
1 month ago
Reply to  Mandi A

Not down on VC at all. It’s incredibly valuable. But in terms of the overall economy, the impact of properly run, local banks would be transformative. This is why Germany has such a thriving SME sector (though the ECB will soon kill it off). The current, large banks are shy because for them, Welsh SMEs are too small. Small banks lend to small businesses.

Banc Cambria is utterly confused, as you say.

Paul Cornelius Davies
Paul Cornelius Davies
1 month ago

There is a lot of common sense in this article and Vaughan G, together with his excellent team, are the ones’ who will, no doubt, see that the excellent suggestions made are implemented.,

Gweirydd
Gweirydd
1 month ago

Lol

hdavies15
hdavies15
1 month ago
Reply to  Gweirydd

Ie wir, lol llwyr. Pryd bynag ma’r gwleidyddion yn gwthio eu trwyne mewn i fyd busnes mae’n arwydd fod pethe yn mynd i droi’n gawl.

Mandi A
Mandi A
1 month ago

Gobeithio but we are three months from the election and no big post-Covid strategy announcement. We will be back in lockdown soon if we are not careful.

Gweirydd
Gweirydd
1 month ago
Reply to  Mandi A

Without a proper network of local banks in place, guided by the Welsh Treasury, the coming recession, and the great depression to follow later, will be far, far worse for Wales.

Mark
Mark
1 month ago

what exactly has happened to Banc Cambria, it would appear to be in a constant state of “just launched” when will I be able to open an account?

Mandi A
Mandi A
1 month ago
Reply to  Mark

As noted above, a commercial proposition to roll it out was received in January by WelshGov under Ken Skates which we know nothing about. They keep saying they are waiting for a licence.

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