In the 15 years since a management buy-out, United Trust Bank has grown its balance sheet from £20m to over £1 billion. But it’s not resting on its laurels, as Loans Insider found out.

United Trust Bank is one of the UK’s fastest growing privately owned businesses and its aim is to be the UK’s premium specialist bank. Its heritage stretches back to 1955 but its modern era began in 2003 when its CEO Graham Davin and Group Managing Director Harley Kagan led a successful management buy-out.

It provides bespoke lending solutions to consumers and businesses across a range of different product sets, including mortgages and bridging, asset finance, structured finance and development finance.

The lender has just posted some impressive results, with organic lending growth up by 40% last year. The mortgage division doubled in size, advancing almost £150m in 2017 and it closed the year with an approximate 15% share of the second charge market.

“We also soft-launched our first charge proposition and invested a lot of time in growing the team and recruiting for key roles including new underwriting managers, a QA manager and business analysts and we expanded our servicing team to handle the predicted growth over the coming years,” explains Buster Tolfree, UTB’s commercial director – mortgages, who joined the bank in 2014 to run the newly formed mortgage division.

“We launched the mortgage product fully in January 2016, having built everything from scratch in the months before – and used our readiness for the Mortgage Credit Directive with second charges as the springboard,” he says. “Whilst some lenders faltered with the MCD transition we were able to steal a march on the competition and get a seat at the table far quicker than under normal circumstances. It was a fantastic experience to bring a new lender to market at such a progressive bank as UTB.” Prior to UTB he spent around 20 years in the mortgage industry, working across standard residential, second charge and buy-to-let market sectors at various lenders.

Gavin Diamond, commercial director – bridging, says that his team had an “outstanding” year: “We launched new products such as heavy and medium refurbishment and grew the number of loans advanced by over 30% year on year,” he explains “and we achieved all this whilst improving our processes, recruiting an enlarged sales force and expanding our internal sales team. Compared to 2016 we have grown significantly… and aren’t planning on stopping there.”

A qualified chartered accountant, Diamond joined the bridging team at UTB in 2013 after spending five years as finance director/CEO at Cheval Bridging Finance. During his time at UTB so far, the bridging team has developed its approach both in terms of process and distribution – as well as increasing its headcount by nearly 40 in 2017 alone.

“We have grown the business from a low volume, high value lender with a focus on London and the South East, to being a lender with a strong appetite to support good lending propositions across all of England and Wales, supported by competitive rates, a strong national BDM presence and an excellent office based sales and underwriting team,” he adds. Tolfree and Diamond are joined by Mike Walters, Head of Sales for both mortgages and bridging. UTB has a number of regional BDMs across the country.

“My background is also from specialist lenders such as Nemo and Optimum Credit, where I won an industry-wide BDM of the year award in 2017,” he says. “For BDMs, having a pedigree in the market and deep-relationships are essential, and that’s what I feel I have brought to the bank.”

Walters explains that the Mortgage & Bridging division have some aggressive growth plans for 2018, and beyond: “In bridging we are working hard on streamlining our processes; we want to say at the end of 2018 that the easiest bridging process can be found at UTB. To this end we spent the second half of 2017 developing a bespoke online bridging portal which will allow our brokers to produce Indicative Terms, DIPs and generate key documents all through a self-service portal, with sales support when needed of course.

“For bridging, 2018 is all about making life easier for our brokers to do business with us. With the products and rates we already have, this will make us extremely competitive.”

He describes how the challenges are different in the mortgage division. “Here it’s all about expansion; both in products and distribution,” he says. “We have been piloting a residential first mortgage product since Q4 2017 and are now rolling this out to our current brokers and introducers. Later this year we will be expanding this first charge product range into other underserved market sectors to offer introducers with more consumer-first product options than exist today.

“Beyond that we’re looking at opportunities in buy-to-let where UTB can make a difference, as we have in second charges. Distribution-wise, we are commencing new relationships with networks and mortgage clubs to complement the existing longterm broker and specialist distributor relationships that we value so highly.”

So, as a relatively new player in the mortgage and bridging marketplaces, what does the bank think of the competitive nature of the markets? Can they sustain the number of lenders there currently are? Walters says yes and no: “the bridging market has a number of sectors, both regulated and unregulated, and is estimated to be worth in the region of £4bn a year. In a market that size, lenders will come and go but those who wish to enter the market now need to bring something different to the table.

Bridging lenders which develop products to serve a niche can do well but the highly competitive nature of the bridging market at the moment means that margins are squeezed and anyone thinking they can come in with a ‘me-too’ proposition will find it difficult to gain traction against some very capable and wellestablished brands. As one of the most well-known, experienced and reputable bridging lenders in the space, UTB are confident that they will continue to grow the business from a position of strength.”

Meanwhile, he notes that the second charge market is estimated to be worth around £1bn a year at present so it’s “a drop in the ocean” compared to first charges.

“We have gained significant market share very quickly and there is considerable room for the second charge market itself to grow,” Walters says. “There are still too many brokers pointing customers straight towards remortgages when a second charge might be more suitable. We are also dipping our toes into the first charge water this year and we wouldn’t be doing that if we didn’t feel confident of the quality of our offering, the sustainability of the market and the difference we can bring.”

With ambitious growth targets, United Trust Bank needs to deal with intermediaries that it hasn’t yet reached. So what message does it have for those who haven’t deal with UTB yet? “You don’t know what you’re missing,” laughs Diamond.

“Seriously, whether you’re new to the sorts of products and services UTB provides or if you have some experience of the products but never worked with us, give us a try or arrange to meet up with one of our BDMs. You won’t regret it.”

This article first appeared in Loans Insider magazine. Photography by: The Last Stop For The Curious, Old Spitalfields Market, London E1