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The 'credit crunch' and changes in capital adequacy requirements have seen banks attempt to increase their income from lines of credit extended across our entire client base. We are seeing increases in both fees and margins for short term working capital lines and a tendancy to restrict the use of overdrafts in favour of LIBOR linked facilities.

The fees and margins for term debt have also increased. Our experience is, however, that it remains a competitive market place and banks do want to lend to good quality covenants. Whilst working with clients, we have been able to mitigate some of the increased costs and if your bank is attempting to increase its income from lines of credit then it is probably a good time to review the whole relationship to ensure that in overall terms pricing and charges remain competitive.

The economic downturn has hit the charity sector with most UK charities expecting donation income to fall over the next 12 months.

This prospect is driving charities to look harder for ways to reduce costs and improve efficiency. Focus on Banking has now worked with 10 major UK charities in the last 18 months and has been able to generate savings in banking and credit/debit card acquiring arrangements of well over £500,000.

The profile of procurement in local authorities has been raised in the last few years through a number of Government publications and reviews. All local authorities are now considering options for procuring good/services on a joint basis with neighbouring authorities.

Whilst undoubtedly for certain types of contracts, authorities will benefit from economies of scale, this does not necessarily apply to banking. In fact banks have tended to show little appetite for complicated joint contracts and will not usually offer discounts or reduced pricing when several authorities collaborate.

The credit crunch has seen the competition between banks for the client balances that law firms hold increase. At the same time, firms have increasingly become concerned about the safety of the balances. Given that banks are also restricting the use of Base Rate linked facilities and increasing margins and fees for credit lines, the dynamics of firms’ bank relationships are fundamentally changing.

Maintaining and increasing client balances held has become a key target for banks and there has never been a better time to review relationships.

We have now worked with more than 65 of the UK’s largest professional firms and the number continues to grow.