By Emma Kennedy
Bankers with a conscience may seem like a rather scarce commodity these days, but Ian Price is just that. As a senior executive with so called ‘‘sustainable’’ bank Triodos, Price has strong views on banking culture and the way that banks should operate.
Triodos was founded in the Netherlands in 1980 and today operates in five European countries, including Britain, where it was launched in 1995 and where Price is based. The independent bank lends exclusively to sustainable and ethical businesses and charities, with most clients in sectors such as renewable energy and organics. Price was one of the keynote speakers at a recent conference organised by the National Organic Training Skillnet (NOTS) in Offaly.
While Triodos does not currently have a dedicated Irish operation, it lends to about 30 customers here, mainly in the organic sector.
For Price, social banking is not purely an idealistic alternative, but also a healthy business model. Triodos has assets under management of about €4 million across Europe. The bank has about 130,000 deposit customers across Europe and finances more than 6,000 projects. In Britain, the bank has almost 25,000 customers and finances more than 65 0 organisations. It employs more than 350 in Europe, with about 70 of these based in Bristol.
Social banks may become more of a force to be reckoned with, as some customers turn their backs on the traditional banking model. Last week, Triodos organised a meeting with 11 other leading social banks. The 12 banks from across the world joined forces to create a global banking alliance.
Price explained that the social banking model differed from traditional banks in a number of ways, namely not relying on wholesale lending markets for funding, not adopting a bonus culture and steering clear of complicated financial products.
In recent months, this model has proved beneficial for Triodos, with Price saying the bank had been largely insulated from the crisis in global markets. ‘‘Banks lost touch with what a bank is all about,” he said.
According to Price, much of the recent credit crisis stems from the fact that banks began to focus more and more on complex products, which were far less transparent. ‘‘Customers’ relationships became distant and confidence was shattered,” he said.
Triodos stays close to its customers and shareholders, since they are its financiers.
‘‘The bank is purely funded by its deposit base,” Price said. ‘‘We don’t go to the wholesale markets whatsoever and funding is either in terms of savers or shareholders.”
Similarly the bank is not listed, meaning that its investors tend to be ‘‘deep green’’ and want to know that their money is being used ethically.
Currently Triodos in Britain offers a full business package and an internet savings account for personal customers. Price said the bank planned to introduce a personal current account in the next 18 months.
Home loans are also on the horizon for the bank, but not a top priority.
‘‘There are ethical mortgage lenders in Britain. It would be in our plan to do that but there are other things to tackle first, such as personal current accounts,” he said.
The bank does not have a branch network, rather it offers customers internet-based accounts. Expanding its product offering and customer base is important to Triodos, but not at the expense of its ideals. ‘‘The bank wants to grow and expand and get its message across using a model that works,” Price said. ‘‘We are innovative, we are looking at new areas, but we wouldn’t stray away from our original objectives.”
Staying true to its ideology does not seem to be limiting its capacity to grow. ‘‘The bank still gets a substantial number of inquiries without having to move away from its principles,” he said.
Working with very specific sectors presents challenges for Triodos but not insurmountable ones. ‘‘There is of course an inherent risk in doing business in very specific markets. In saying that, within the portfolio we have a huge spread within our sectors,” Price said.
Typically, Triodos will not lend more than 70 per cent of the total cost of a project, and Price said that prudent lending criteria would not be ignored, regardless of the ethical worthiness of a project.
‘‘There is a real ethical question as to whether you support smaller projects against higher value ones, said Price, who spent more than two decades of his career in a traditional bank.
‘‘What we try to do is to balance some really good start-up projects with others. I worked for a mainstream bank for 25 years and it did its very best to knock out your individuality, your ability to assess propositions and get to know your customers.
It was all a very fixed model. It is so refreshing to get into a company that just does the right thing and gives you an ability to make decisions.”
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