Hard or soft Brexit. Government infighting. A maverick in the White House. Worsening Russian relations. A cooling property market. A new Housing Minister (again). A diminishing construction labour workforce and a resurgent political left-wing.
These are just a few of the factors contributing to a feeling of instability and uncertainty which seems to have enveloped many sectors of UK PLC. Despite negotiators coming to some agreement about the Brexit transition period, there’s still a mountain to climb in terms of establishing the long-term picture for trade, law and borders. No surprises then that many brokers and clients are experiencing lenders retreating to cautious vantage points to see what unfolds from a safe distance.
Not us. We lent throughout the credit crisis and have increased our lending every year since. Last year UTB’s Structured Finance division helped the Bank to surpass a £1bn balance sheet for the first time. This year our ambitions are even greater. We’re well prepared for a potentially difficult divorce from Europe.
Fortunately, UTB is an entrepreneurial and pragmatic lender. It doesn’t impose blanket bans barring its’ divisions from operating in certain sectors or from lending to certain groups of customers. Instead, our highly knowledgeable team is encouraged to look at every proposal entirely on its own merits. Our size is a distinct advantage. It allows us to be nimble and adaptable to change, an essential skill in the current environment.
Let me give you one recent example of a developer who’s plans for a new £20m housing development were almost scuppered when their lender backed out of the deal at the eleventh hour. This development would provide 100 much needed new apartments in the commuter belt, transforming a dilapidated, eye-sore office block into smart new homes under permitted development rights. UTB was approached after the original lender withdrew mid-January, just two weeks before the intended completion date and the point at which the developer needed £9.6m to complete the purchase and settle the sizeable VAT bill which went with it. To cut a longer story short, we marshalled our forces, had first class support from valuers and lawyers and issued an offer of funding by the end of January. In the following week the team completed due diligence, met the beneficial owners, took advice on overseas legal matters and on the 8th of February the customer drew down the loan to complete the purchase. Job done.
At UTB we understand that structured finance clients, by their very nature, tend to be more adventurous and sophisticated than most, and will therefore present lenders with more challenging and complex deals. However, we also recognise that these people have vision and an innate ability to see opportunities when others see only threats. Our mission over this next year and beyond is to enable these investors, developers and entrepreneurs to keep turning their visions into realities.
Gerard Morgan Jackson – Head of Structured Finance – United Trust Bank