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An Interview With Steve Patemanthe head of uk banking at santander on why he backs britain’s entrepreneurs

Interview

‘Are you a fan of Les Miserables?’ Asks Steve Pateman, Head of UK Banking at Santander, as I arrive to his office in London for our interview. Wondering at first what the relevance was to my line of questioning, which is to find out what Santander was doing for UK entrepreneurs in comparison to the other big banks, I quiz Steve on the reference. “Les Miserables took just 18 months to film,” he says. “In that time the production team managed to make Greenwich look like nineteenth century Paris by being innovative and working together to deliver anything but an average film. If a bank was making a film they’d probably see what they could strip out, they’d cut back on creativity and would try to save money wherever they could. Personally, I’d rather look through the camera lens, see what the customer sees and, ultimately, do things differently.”

Straight away I warm to Pateman. Not just because he’s a fellow Les Mis fan, but as an assistant wheels in a trolley of tea and biscuits he is the first to rise out of his seat to ask whether I take sugar and milk. A fellow journalist informed me before my meeting

with Steve that I’d be in for a surprise and that of all the bankers he has interviewed, Pateman is the most down to earth. I appreciate his calm demeanour and open, honest approach, saying a silent thank you to myself that I haven’t had to deal with an army of PRs like many other interviews I’ve held in the past. I then launch straight in, beginning with how Steve’s career in banking began.

“I left school at 16 and started at NatWest in 1980 without any real career plan, because there were 3 million unemployed people at the time and just getting a job seemed like a good idea” says Steve. “Five or six years later I stumbled into corporate banking and found after it initially being a complete mystery to me, I actually understood it.

“Then just as I moved into general management roles toward the end of the nineties NatWest was taken over by RBS and I ran the corporate, commercial and small businesses banking at RBS until Santander approached me in 2008. They asked me to set up their corporate and commercial bank, which at the time didn’t exist.”

BY KELLY DOLAN, EDITOR

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However, despite Steve’s impressive track record he tells me nothing could prepare him for the year of ‘08, which was of course the year that the financial crisis shook the world. As a result, despite anticipating a role that would allow him to carve out and action an organic plan for the bank, Santander’s acquisition of Alliance & Leicester saw him managing a business that would have otherwise been bankrupt.

“I’m not going to say it was an ideal acquisition, but it did give us the impetus to get on with it because I had a business to manage” says Steve. “We actually ran the corporate and commercial bank on the Alliance and Leicester systems for three or four years, so in many ways it gave us the stimulus we needed.”

Despite the financial storm, Pateman was instrumental in embedding Alliance & Leicester’s frameworks into Santander’s current offering, and in turn his leadership helped to boost expansion that has seen the bank grow its SME lending by 20% per annum over the last four years. “Our plan is to get our market share, which is currently at 5%, up to double digits and we are very much focused on building that franchise” says Steve. “There hasn’t been a bank in the UK that has really made a mark on the corporate, commercial and business space across the full range of products and services, but I think we can, largely because our strategy is the opposite to most banks in that our focus in on SMEs rather than large corporates.”

With Santander differentiating itself as the bank of choice for Britain’s fast growth businesses, how had Steve evolved from spending a lot of his time visiting large conglomerates as a corporate banker to turning up at local events to network with small business owners?

“To me it doesn’t matter what level you are at, whether it’s a guy stocking light bulbs in Huddersfield or someone running a multimillion pound hotel business,” he says. “Meeting customers, looking around their business and listening to their plans is what really excites me.

“That’s what I grew up doing and that’s what I still enjoy. However, now I am also responsible for Santander’s retail business and that presents it own challenges and opportunities.”

While Pateman’s position means that he oversees most of the bank’s various sectors, he was instrumental in the development of Santander’s Breakthrough Programme, set up by the bank two years ago to help support Britain’s fast

growing SMEs through specialised funding and financial advice, as well providing them with access to successful companies and learn from leading entrepreneurs. Steve tells me they spotted a need to set up the programme as many fast growth companies find it difficult to obtain the funding needed in order to grow. Today, Breakthrough’s £200 million Growth Capital Fund provides mezzanine financing that not only offers reasonable priced investment funding without the ownership cost of private equity but also repayment terms that don’t impinge on cashflow. Candidates who display strong growth and a robust business plan can apply through their local Santander relationship director.

“The fascinating thing about Breakthrough is that it is constantly evolving and it offers so much more than just finance” says Steve. “One of our offerings involves sending entrepreneurs on Trade Missions, which have absolutely fascinated me. You get a real insight into how passionate small businesses are and who has the balls to go out and tackle a new market.”

Another pillar of Breakthrough is its internship programme, whereby graduates are offered an internship with the entrepreneurial, fast moving companies within the Santander Breakthrough network. “I’m really proud that we’ve taken young people out of university and given them employment, with many of the students joining the company after interning.”

Steve also mentions Breakthrough’s live events, which welcome around 100 small business owners in local regions to hear inspiring entrepreneurs take to the stage and talk about their journeys, as well as allowing them to network with each other. “Those events are great because they have never really been about Santander” says Steve, “They are all about the entrepreneurs and their stories, from Paul Lindley of Ella’s Kitchen to Mike Soutar, founder of Shortlist Media. That’s given it vibrancy.”

What did Pateman believe made the Breakthrough Programme unique from entrepreneurial initiatives run by larger banks? “The great thing is we still have so many ideas that will see us keep going for the next couple of years whereas some of the other initiatives run by larger banks have dried up. Nobody has done trade missions or the internship programme we have and I think that it connects and resonates with people. We have also learnt a tremendous amount about what small businesses look for and are interested in. We are connecting entrepreneurs to some of the UK’s most iconic companies, from McLaren to Saatchi & Saatchi and it’s great to see these businesses embrace these entrepreneurs. One of our entrepreneurs owns a vets business in the Midlands and he would never normally gain exposure to a company like that, where he can learn from the CEO and apply this to his business, yet we help to make it happen.”

By moving away from just supporting the commercial and corporate sectors of the bank, Pateman admits that being

“We are connecting entrepreneurs to some of the UK’s most iconic companies”

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Interview

around groups of entrepreneurs has also inspired the way he runs his teams within Santander.

“When I listened to Mike Soutar and the thought process around ShortList and his other titles, I was inspired when he said he spent hours sitting in his van in the pouring rain working out which exit people came out of at stations to figure out where to place his vendors” says Steve. “Now when I visit branches I spend some time in the town before I go to the branch so that I know roughly what the house prices are in the area; have seen what type of shops there are and get a real flavour for what the town is like before I sit down with the branch manager. And when I make these visits I don’t arrive in a chauffeur driven car, I get the tube, because quite frankly it shows people I’m normal and it’s a lot easier to organise!”

While he is inspired by entrepreneurs, it seems that Pateman seemed to always possess qualities as a leader that made him quite entrepreneurial. “One thing about organisations is that they can exist like the Emperor in the Emperor’s New Clothes. Until the little boy says ‘he hasn’t got any clothes on!’ everybody assumes he has. Part of my job is to be the little boy.”

His reference to well known films and fables doesn’t surprise me, as I was told by a Santander staffer on the way in that

Pateman is known for including inspirational stories to his team in the offices internal newsletters. “I like to use stories and inspiration to get my point across” he says. “One of my favourites is the Wizard of Oz, where each of the characters thought they needed to go to the wizard to get a heart or a brain. Then it turns out that the Wizard was just a little man with a machine spinning around very quickly and actually the characters already had all of the qualities they were looking for. My message is, there’s no Wizard of Oz, it’s about us, the team and we have the gift to change what we want.

“My job is to be provocative and to challenge. That’s the hardest part of the job. You have to find a way to lead people so that they want to follow you but at the same time your job is to ask ‘Why the hell did that happen?’ or ‘Why did we do this?’ Sometimes when a transaction completes and you know you came close to losing it you have to say ‘Well done, but let’s go back and think about the stuff we could have done better.’ I think that’s a bit entrepreneurial. Sometimes that irritates people and they think I am being a miserable sod, but what I want them to see is that when you came close to falling off, learn that lesson so that next time you don’t fall off.’

To find out more about the Santander Breakthrough Programme, visit www.santanderbreakthrough.co.uk