Giles Thorley hopes to dish out £200 million this year. He’s not a movie star on a spending spree or a Bill Gates-style philanthropist, he’s the head of the Development Bank of Wales and that money will be helping businesses to recover from the Covid pandemic.  

The bank is unique in Wales in that it is owned by the Welsh Government and exists to support the economy to provide finance to businesses to help them grow. Or, at the moment, just survive.   

Giles says it fills a much-needed gap in the market. 

Dressed in a business suit while working from home, he says the bank is important for the Welsh economy and even more so while living in a Covid post-Brexit Wales. The bank is there to offer support for businesses who might struggle to secure funding elsewhere due to their location. 

He says Wales is one of the areas in the UK that suffers most significantly from the lack of investments compared to other parts of the UK.

The National Wales:

Development Bank of Wales CEO Giles Thorley Credit: Development Bank of Wales.

“The market for lending and investment is quite odd in the UK," says Giles. "It is not even and fair. There are parts of the country that do not have as much support as others would. If you want to start a business in London, you have got far greater chance of getting funding than you have in Swansea.” 

A lot of banks have their central decision-making centres outside Wales. Giles says decision making for HSBC is based in Birmingham and Lloyds now bases its decision making in Exeter for the South West and Wales. 

The devolved Government identified this as a problem holding back the Welsh economy, so created the bank so that it could fill those gaps. The bank only invests in businesses that are in Wales or willing to relocate to Wales.  

Giles says another issue is that there are great of disparities in terms of the performance of the economy and the viability of businesses across Wales. 

“We need to make sure that we have an operation that could reflect the whole of Wales. Whether it is in the Valleys or in Powys or it's in Snowdonia,” he says.  

The National Wales:

The bank helped finance a commercial property deal near Barry for Dawan Development. Credit: Development Bank of Wales.

The bank has provided a total of £137 million to more than 1,500 companies between April and the end of September 2020, with the Covid-19 Wales Business Loan Scheme accounting for two-thirds of that at £92 million across 1,334 businesses.

The remaining £45 million was spread across more than 200 deals, which is comparable with the levels of investment seen the finance year 2018-2019, and which leveraged a further £27 million investment from the private sector. Equity investment (where the bank takes a stake in the company rather than a straight forward loan) totalling £8 million included nearly £5 million for technology businesses with 10 investments made in 10 weeks at the height of lockdown.  

The role of the Development Bank of Wales is even more important now as the economy needs to recover quickly from Covid. The bank can lend anything from or invest anything from £1,000 to £10 million. 

That £1,000 pounds could be to help a start-up, it could be someone coming out of the art college wants to set up a photography business and needs to buy equipment. 

Whereas a £10 million investment could be in a decarbonisation projet for a medium sized business as they tried to as they develop and grow their company. In the recent Covid support the Covid Wales business scheme, they supported over 1300 businesses right at the start of the Covid crisis.  

“Our role now is to make sure that we continue to be open. What tends to happen in challenging times with conventional banks is their investing criteria becomes more strict and... they lend less," says Giles.   

“We need to be there whatever happens and that is the key to make sure that we are constantly available to the investors active to businesses. We have proved that throughout the course of this year we had the busiest year we have ever had we have walked.   

“We are probably going to be doing well over £200 million worth of investing in Wales this year compared to last year where we did £102 million in times of difficulty, we have been very active.” 

Areas where the bank has made growing investments this year include the tech sector and support for small house builders.

Cufflink, a North Wales data privacy and cyber security company, secured more than £500,000 in equity and grant funding, to develop a safe and secure app to help people control how their personal data is used. The six-figure seed equity funding round was led by the bank and complemented further funding from a group of London-based angel investors. 

While the pandemic has created economic hard times, Giles believes people in Wales are becoming more entrepreneurial, and more keen to start their own business, which in turn has been a catalyst for potential entrepreneurs to secure investment from the bank.

The bank has also supported businesses pivoting to the changing consumer demands during the pandemic, such as by offering takeaways.   

“There are some that are even though they have not done well they wanted to take the opportunity to invest," says. " While businesses are being quiet or closed, we have been able to help those, as well as businesses improving their profits. I am pleased with this, that we have continued to operate despite all of the challenges. 

"Entrepreneurialism in Wales is alive and well.” Giles says the bank has seen an increase in start-up businesses seeking funding over the last year, investing in 83 start-ups from April to January compared with 74 across the whole of the 2019/20 financial year and 62 the year before.

"Some of that is a general upward trend over the last three years," he says. "But it also shows that a lot of people are deciding to strike out on their own following the Covid 19 pandemic. We anticipate this trend will continue through 2021."

In 2020, Development Bank of Wales offered a total £1.45 million in micro loan funding compared to £700,000 in 2019 - doubling the number within a year. New businesses in Wales are evidently on the rise and could rise in 2021 again as people who have lost their jobs or been furloughed and decide now it the time to start that.  

The National Wales:

Health & Her, one of the technology companies supported by the bank, it specialises in products for the menopause market.

When asked whether he is worried about businesses across Wales carrying high levels of debt hampering the recovering, Giles says: “We are concerned that there will be some businesses that will be held back by the debt they have taken on to survive through the Covid lockdowns.

"They will need assistance to develop a plan to repay the debt in a way that doesn’t hamper growth. The UK Government has already announced a scheme to assist in this and we will be doing our part in supporting sustainable businesses through the recovery.

"Many companies need to understand the pathway of getting out of lockdown. How easily they can get out of debt. If not, talk to the bank.” 

The Covid pandemic has made the work of the bank even more important. But, it too has been touched by the impact, with home working the new normal, at least for now. That prompts a discussion about his daughter's artwork on the wall behind him during this interview, and confusion over whether to look at the person or the camera during an online video call. 

He may have control over £200 million of potential loans, but the man leading the Development Bank of Wales faces the same everyday challenges as everyone else.