Shawbrook residential property finance up 21% year-on-year

Shawbrook property lent out £2.3bn in the fist six months of the year, up 44% on the £1.6bn it parted with in the same period last year. Of this it lent £553m to residential clients, up 21% on the £456.2m in H1 2015.

Originations were also up 19%, from £495m to £416m. The firm said 86% of originations in H1 were supported by residential property, 8% by mixed commercial and residential and 6% by commercial property.

Shawbrook’s property division provides mortgages for investors, businesses and personal customers in residential and commercial asset classes, both long and short term. It also lends to trading businesses to fund acquisitions and refinancing and to personal customers on the second charge market.

The firm said it had benefited from a “general preparedness” for the Mortgage Credit Directive, which transitioned second charge mortgage lending from consumer credit to mortgage conduct rules earlier this year. It had also ensured a smooth service during the “abnormal peak of activity” in March created by the Stamp Duty surcharge deadline.

Shawbrook recognised the EU referendum in June had brought about uncertain times in the market but said it had not yet been impacted materially by it.

Shawbrook’s business finance division, which lends to SMEs and provides secured senior debt to smaller financial institutions, sold loans worth £1.1bn in the period, up from £853m last year and surpassing its 2015 full year lending levels of £945m.

Overall the lender posted pre-tax profits of £38m, up 14% on the same period last year.

Chief executive Steve Pateman said in the firm’s half year results: “At present we are not seeing any material change in activity and indeed some markets that slowed in the run up to the referendum have picked up. However, it is too soon to fully assess the medium term impacts on the broader economy given the number of outcomes that remain possible.”

He said Shawbrook would continue with its risk and growth strategies and saw opportunities in the main banks’ turn to exit non-core markets.

“We will continue to be cautious yet confident in our outlook and we are well prepared for a softer economic environment,” he said.

Earlier in the year, Shawbrook was hit with a £9m impairment charge following a breach within its asset finance division. It also saw CFO Tom Wood resign but said this was unrelated

The incident occurred when a number of loans in one office were underwritten in a way that did not meet Shawbrook’s ‘strict’ lending criteria.

In its latest results the bank said the irregularities had been rectified and it was “confident that the upgraded risk management systems and controls will prevent the recurrence of such control breaches in the future”.

It added: “The control breach has not changed our focus on our core customer segments and we continue to deliver on our mandate to provide finance to poorly served sectors.”

Shawbrook has since made a number of appointments to bolster its strategy going forward. The firm appointed Angela Wakelin to chief operating officer, who will lead the work on implementing the underlying operating model to support the firm’s growth strategy.

It also hired Emma Cox as sales director for commercial property, and promoted Sarah Woolf from senior relationship manager to head of sales in the division.