2003 will be another year of upheaval and challenge for the mortgage industry but, as ever, some of its players will be more in control of our destiny than others. Mortgage Solutions has picked 20 of the most influential people in the mortgage sector, who will shape the market in 2003. Some already command the influence that should see them leave their mark on the year, while others are expected to make an impact as the year unfolds.
The list details the companies alphabetically and is largely subjective so the choices may leave some reeling at what they feel are glaring omissions, or unworthy inclusions. If this is the case, please let us know. We will look to publish readers’ letters detailing their views on the list itself, and the changes you expect to see in a year’s time. All correspondence should be sent by email to firstname.lastname@example.org
Luqman Arnold, group chief executive of the Abbey National Group.
Abbey is still the second-largest lender in the UK in terms of estimated market share, with over 12% in 2001 (latest CML figure), but Arnold is at the helm of an unwieldy ship that needs to be turned around quickly. 2002 was not the best year for Abbey National with former chief executive, Ian Harley, resigning and various take-over threats, but it has pledged to re-focus its attention on mortgages during 2003. It is also set to push into the equity release market.
Paul Smee, director general of The Association of Independent Financial Advisers (AIFA).
Smee is expected to be an increasingly influential figure in the mortgage market this year, especially with regards to forthcoming regulation. Following AIFA’s strategic alliance with the National Association of Mortgage Brokers and Advisers (Namba) late last year, to help set up a trade body for mortgage brokers, Smee’s profile is set to rise. He already has a close working relationship with the Financial Services Authority (FSA) and during 2002 persuaded it to drop its proposals for defined payments in CP121.
Alliance & Leicester
Richard Pym, chief executive, Alliance & Leicester. (A&L)
As a top ten lender in the UK, A&L is a big player in the high street sector, with an established brand and distribution network. Pym will be looking to make further inroads into the ‘big fours’ hold especially in the small to medium enterprise (SME) mortgage market, as A&L pushes its influence in the SME banking sphere. Following restructuring, the group hopes to save an annualised amount of £100m on its 2000 cost base.
Bank Of England
Sir Eddie George, governor of the Bank of England, and Mervyn King, the deputy governor, who is set to replace him.
One of the most influential players in the mortgage market since 1997, Sir Eddie George, the governor of the Bank of England, is set to retire in the summer this year. Following the Government’s decision to allow the Bank of England to set interest rates in 1997, George’s Monetary Policy Committee (MPC) has been widely credited as a key factor behind the current housing boom, bringing interest rates down to 4% and holding them there for over 12 months. However, King is regarded as a hawk on inflation, and as a member of the MPC, voted in favour of higher rates last year. His appointment makes it unlikely that rates will come down in 2003.
Bank of Ireland and Bristol & West
Richard Brown, managing director, personal lending Bank of Ireland UK.
Brown has now taken over all aspects of mortgage lending for the group, having had a hand in developing its reputation as one of the more innovative lenders in the UK. Involved in adverse credit and buy to let, as well as standard loans, the group is currently re-vamping its proposition with regards to first-time buyers and self-certification mortgages. Bank of Ireland UK recently made a bid for Abbey National, and, had this come off, it would have had serious repercussions for the mortgage market. Industry commentators have predicted that a further bid may yet be made in 2003.
Bradford & Bingley
Peter Barret, managing director, retail of Bradford & Bingley’s The Marketplace and IFA network, Charcol.
The Bradford & Bingley group is a big player in the mortgage market through its loans, and powerful intermediary groups, The Marketplace and Charcol ‘ which remains a feeder for around 50% of mortgage lenders’ business. Barret joined Bradford & Bingley in 2001 and has a wealth of consumer financial services experience, particularly in the IFA sector having worked in the financial services industry for over 17 years. He will need this in 2003.
Michael Coogan, director general of the Council of Mortgage Lenders (CML).
The CML is the representative body for the entire residential mortgage lending industry. It currently has 145 members, who together account for around 98% of residential mortgage lending in the UK. Coogan has been director general of the CML for over six years, and was also appointed to the MCCB board in July 1998. The CML has a degree of influence with the FSA and Coogan will be an important player in helping bring the FSA up to speed as the statutory regulator in 2004.
Sir Howard Davies, chairman of the FSA
The FSA is the mediator between the Government and the financial services industry. It takes the Government’s ideas and turns them into workable propositions.
Davies is an obvious choice, as he has spent the last four years preparing the FSA to take over as the statutory regulator of the financial services industry. However, with mortgages due to fall under its auspices late in 2004, Davies will not be around to see it because he is due to stand down later on this year, but his influence will be felt long after his departure. Once Davies has gone, we should expect his replacement to exert just as much influence, whether this turns out to be John Tiner, the managing director of the FSA, as some expect or not.
Gordon Brown, Chancellor of the Exchequer.
Brown sets the economic policy for the UK and can therefore change the trading environment for the mortgage industry more than anyone else. It was he who granted the MPC its virtual independence on interest rate policy, and his five-economic tests that will ultimately decide whether we move into the euro-zone. This year he looks set to alter the rules regarding Stamp Duty, but whether this happens or not, his spring Budget is bound to contain something of importance for the industry.
Stephen Knight, executive chairman of GMAC-RFC.
In terms of growth in recent years, GMAC has been expanding exponentially. Helped by financial backing from General Motors, its powerful parent company, and its positioning as an all status lender, it is moving towards becoming a top ten player. Its growth has been helped by developing techniques new to the UK market such as correspondent and through-lending, and vast securitisations, which take its loans ‘off-balance’ sheet, minimising the risk.
Ian Corfield, head of intermediary sales and partnerships at HBOS plc.
As a group HBOS plc is the largest lender in the UK by some distance, with almost 22% of the market. Therefore any changes it makes are likely to have serious repercussions on the whole market. He joined the company in 2000 and has been involved both in the overall development of the business and in retail sales. While Corfield only moved into his present position in August last year, he is expected to make his mark on the group in 2003 when he turns his attention to the development of the intermediary service proposition for Halifax, Bank of Scotland, The Mortgage Business brands and Colleys.
Keith Carby, chief executive of Inter Allianc .
Carby leads the biggest IFA operation in the country and will be looking to utilise its size and strength as regulation kicks in and smaller players struggle to comply. Currently mortgage business accounts for around 5% of its total turnover, although this is set to rise dramatically with the launch of its mortgage club over the coming weeks. With intermediaries controlling over half of all mortgage business in the UK market, Carby will have a big role to play, but not without competition.
L&G Mortgage Club
John Cupis, sales and marketing director at L&G.
Cupis heads up the mortgage club and has done so for over two years. Still waiting to finalise the number of completions in 2002, L&G said it had done around £19bn on applications last year. Viewed by many as one of the steadiest UK financial ships, Cupis will look to further establish it as a mortgage market leader in 2003, building on its past success.
Luke March chief executive of the MCCB
March joined the MCCB as chief executive in April 2000. Previously, he was compliance director and corporate governance director at BT, and prior to that spent 15 years at TSB. He currently faces the challenge of getting the mortgage market into shape before the FSA takes over in 2004 and will have his hands full making sure the cross-over goes smoothly. The examination deadline of 31 December 2002 for the FSA to qualify will also see the MCCB given the teeth to stop those operating in the market illegally. A busy year ahead monitoring the regulations in place and preparing for those to come.
Mortgage Brain Limited (MBL) and Mortgage Trading Exchange (MTE)
Mark Lofthouse, chief executive of MTE
Lofthouse heads up these operations, which provide sourcing and online trading services to mortgage introducers and financial advisers. Prior to this, Lofthouse was the managing director of AssureSoft. The fight for IT provision to the mortgage industry has been fierce and shows no sign of letting up as IT becomes increasingly important.
Philip Williamson, chief executive of Nationwide.
Nationwide is one of the mortgage market’s leading brands which is bolstered by its widely-used monthly market figures. In 1994, Williamson was promoted to divisional director and subsequently appointed to the Board in April 1996. Previously, he worked for Lloyds and headed up its commercial lending arm. Williamson will have to work hard to distance the brand from the increasing number of lenders snapping at its traditional highstreet customer base.
Adam Applegarth, chief executive of Northern Rock.
The company has been innovative in its approach to the market and has been one of the leaders in securitisation and alternative funding. It is ramping up for a big push in equity release where the potential is huge. By market capitalisation, it is the ninth-largest quoted bank in the UK. It has a branch network of 76 with intermediary and direct channels also used to further its business.
Unquestionably an influential player, success in the equity release market could further Applegarth’s influence if the market achieves anything like its potential in the coming years.
Pink Home Loans
Tony Jones, managing director of Pink Home Loans
Jones was recently appointed as managing director in May 2002, having previously been head of new business with UCB Homeloans. Last year, Pink completed over £1bn of mortgage lending, doubling the business it had done the year before. As the intermediary market continues to change and packagers develop their offerings, Pink will have to fight hard to maintain its status as a leading packager, although its involvement with the newly established Mortgage Co-operative will help push forward its business.
Prudential Premier Mortgage Services
John Malone, national mortgage manager of Prudential.
Six years ago, Malone joined Scottish Amicable to set up Premier Mortgage Service. Last year it was responsible for around £25bn of mortgage business last year from a panel of 35 lenders and has close links with the MCCB, CML and ABI. With clubs set to expand as the pressures of regulation and compliance force smaller intermediaries to take shelter, Malone will be fighting to keep PMS at the top of pile.
Benny Higgins chief executive, retail banking at RBS.
Higgins has responsibility for both NatWest and The Royal Bank of Scotland brands. Both are well known and powerful brands and RBS will be looking to push their influence. RBS will also be looking to mine its customer base with cross-selling opportunities from its mortgage business available through subsidiaries like insurer Direct Line. Like all of the big players, efficiency and cost effectiveness will be huge issues for the bank in 2003. If Higgins can get it right then there should be a good year ahead.