Karen Bennett, Sales and Marketing Director, Commercial Mortgage at Shawbrook Bank, speaks to B&C about the lender’s past 12 months and how 2014 will be ‘The Year of the Lion’…
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We’ve been thrilled to see those plans starting to come to fruition in 2013: in April, our annual results revealed that Shawbrook had made an underlying profit of £2.6 million in its second year, in September we announced that the bank had exceeded £1 billion in lending, and in the last year the Commercial Mortgages division alone grew by 200 per cent.I was talking to Ian recently about the commercial team’s continuing appetite to lend, and about how incredibly far the bank as a whole has come in 2013.
Ian commented on his own experience so far as CEO of this small but hugely ambitious new lender: “Coming to Shawbrook from a career within larger banks has been a fascinating experience. It is striking how quickly innovation happens here – we can launch new or adjusted products onto the market within a matter of days or weeks, which enables us to be very responsive to market needs. We’ve invested heavily in teams and infrastructure as we’ve grown, which means we’re now in a very strong position to complete even more business next year. The broker channel really has been at the heart of the Commercial Mortgages business this year, and as we enter 2014 our brokers will continue to be valued partners.”
Ian is not alone in his excitement about the possibilities for Shawbrook in the year to come. The Commercial Mortgages team have big plans for the dawn of 2014, beginning with a number of product innovations – so watch this space!
We also, as Ian suggests, remain utterly committed to the broker channel. In fact our ability to be responsive to the market owes no small debt to them. Brokers are at the frontline, so to speak, on a daily basis so we are always eager to hear about their perception of the market and the shifts and changes they sense within it. It is for this reason that we launched the first of our quarterly Broker Barometer surveys in October, and we found the data and issues it raised very interesting indeed.
For example, it seems that at the end of Q2 commercial mortgage brokers were starting to feel more optimistic. The majority of intermediaries surveyed felt that the economy as a whole was looking more promising, with one broker commenting on the ‘upturn and return of the feel-good factor’ they were seeing. However, that same broker added that ‘unfortunately this confidence has yet to spread to the valuation sector.’ Another noted that while ‘the housing market improvements are a welcome sign, everything else still feels very fragile.’ The idea that trading businesses were having a harder time than property investors in some quarters was also expressed by a number of respondents. While we’d like to think that prospects have improved even more since then (our next barometer will reveal all), the brokers’ outlook in October is perhaps best described as cautiously optimistic.
Nevertheless the majority of brokers did report an overall rise in the number of commercial deals they’d completed on. They also pinpointed the buy-to-let (BTL) and short term loan (STL) markets as areas of particular growth. This is something we have continued to see in the remainder of 2013, and – in my opinion – it will remain the dominant trend for 2014. Looking at recently published lending figures, the BTL market is showing no signs of slowing down. This is perhaps unsurprising given the fall in social housing and the difficulty owner-occupiers face in accessing finance. On the STL side of things, we see refurbishment as a key area of growth. Our 2014 rates and products for both these markets will therefore reflect this.
In supporting these markets, however, we also take very seriously our duty – to brokers and clients alike – to lend responsibly. This means taking into account the probable changes to current low interest rates in the coming months and years, and ensuring that brokers and their clients gear their business sensibly.
The Commercial Mortgages division is determined to play a large role in Shawbrook’s growth story, and as part of that we want to help grow the markets in which we – and our valued broker partners – operate. As 2013 draws to a close, then, we are already marching ahead into a 2014 full of loan completions, innovation, and a wholeheartedly optimistic outlook.
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