TML’s Beaumont on Shawbrook deal: ‘Where we end, they start’

Beaumont (pictured) noted that the deal eventually became a natural progression of the relationship built between the two lenders and gave greater funding security to TML.

And in a reassuring step for employees, he pledged that rather than job losses, TML was able to speed up its rate of recruitment as it looks to expand its footprint in the market.

“It has been a long time in the making,” Beaumont told Mortgage Solutions.

“Discussions have been occurring over several months. When Shawbrook made the initial investment three years ago there was always an ambition that we would work with them more closely.

“We had conversations about funding in the residential range and then that culminated in this agreement.”

Beaumont confirmed that TML will continue operating as a separate regulated entity and retain its brand but “with the benefit of funding from a retail bank”.

“We are going to become their specialist residential and buy-to-let arm,” he added.

“We have got different product ranges so that’s completely complimentary. We are going to stick to what we are doing best and will look at other product suites in the future.

“Where we end, they start – they don’t do what we do.”

Funding stability

One of the most important developments for TML from the deal will be securing another source of funding, meaning it will not be wholly reliant on capital markets anymore.

The difficulties that can cause were most evident last year when the markets effectively shut down for several months, leaving some lenders struggling for capital and unable to fund their operations.

Beaumont also noted the deal would help address the possibility that the Prudential Regulation Authority (PRA) may want lenders to put more capital aside.

“It’s a good time to be doing it. The specialist mortgage could have some challenges ahead,” he said.

“But the timing was right for us and Shawbrook, and if you take the pandemic away we would still be having the conversations.

“We built it as a business we wanted to sell.”

Recruitment, not downsizing

Mergers and acquisitions can often lead to job losses at one or both of the businesses involved, however Beaumont was adamant that this would not be happening at TML.

“No, far from it,” he said. “We are recruiting right now – we have 134 employees and will be going up to 150.

“The investment is going into the business so we’ll be able to recruit faster and harder.

“Existing jobs are secure – we’ll carry on our growth path but don’t have to worry about our funding and balance sheet, we just focus on growth strategy.”

Beaumont said the three-year long arrangement where the management teams had worked closely and identified similar cultures in the organisations meant they knew what they were getting into with the deal.

Technology harmonisation

Ultimately, coordination may come in technology development for TML, its brokers and customers, with the lender planning a significant digitisation strategy for the next two years.

“A lot of time, money and investment is going into developing that. It will be a part of the harmonisation as we get to know Shawbrook,” Beaumont said.

But for brokers, not much is expected to change. They will still be meeting, virtually at least, TML business development managers and if anything the product range is likely to widen as the new funding becomes available.

“We’ve got ambitious targets for our residential and buy-to-let growth,” Beaumont concluded.