William Phillips is senior vice president and group manager for Comerica’s Middle Market Banking Group, covering the South Bay area in Southern California. Phillips has been with Comerica since 2000 and is responsible for supervising a team of bankers who build relationships with privately held companies with revenues of $10 million to $100 million.
Q. What role does a bank play in assisting its customers in a down economy?
It is critical to quickly and clearly communicate during these times of change. Pricing, terms and conditions for most services and products are adjusting to market conditions. We try to promote a collaborative process during these conversations in order to create a win-win solution and maintain solid relationships.
Q. What are ways a company can work with its bank to save money and become more efficient in a down economy?
Cost of capital is higher today, and therefore, interest rates have increased. However, there are still ways for our customers to control costs. Most commonly is a review of depository (treasury) services used to manage cash and deposits. As customers experience lower revenue volume, some services can be eliminated or combined without losing efficiency. Customers with lines of credit can recognize lower unused or commitment fees by re-evaluating the size of credit lines. Lastly, by combining banking services into one institution, companies can recognize economics of scale using higher balances at one institution to offset costs through account analysis.
Q. What information should a business update its bank on?
Comerica is a relationship bank, and we establish strong ties to senior management. This helps us support the business when times are good and assist in restructuring when times are bad. Besides regular submission of financial statements, projections and agings, it is important to hold regular meetings to discuss higher-level issues, like changing strategies of gaining market share, new cost-cutting initiatives or expense controls, and planned investments in fixed assets or technology.