Bank debt has not fully returned and it is still costly, but faith in bankers has not completely evaporated, according to research by accountancy firm BDO Stoy Hayward. 

Bank debt has not fully returned and it is still costly, but faith in bankers has not completely evaporated, according to research by accountancy firm BDO Stoy Hayward.

The firm interviewed 140 financial decision-makers in mid-market companies and more than half (55 per cent) found the lending process protracted and difficult.

Despite Alistair Darling’s efforts to encourage credit flow, 46 per cent of respondents did not think that the cost of lending would improve during the next year.

Neil McDaid, director at BDO Stoy Hayward, said: ‘The lending commitments of the state-owned banks have failed to make a significant impact on borrowers so far. Banks will increasingly want to lend to good businesses but, given the low base of debt providers in the market, there will be no need for them to undercut one another for some time to come.’

Unsurprisingly, this has coloured attitudes towards the banking sector, with 67 per cent of companies stating that their opinion of banks had worsened. However, most respondents (85 per cent) felt no change, or even an improvement, in their own banking relationship. In fact, two-thirds (62 per cent) believe that their bank understands the changing needs of their business.

McDaid said: ‘Despite a lack of trust caused in the main by the conduct of investment banks, mid-market businesses retain a strong faith in their own banker. Businesses are improving the quality and quantity of information that they share with their bank, and they expect more in return.’