Sancus Lending’s disposal of Gibraltar business sees loss deepen to £14.1m

The firm said its profit for the year ending 31 December 2022 was impacted by an “exceptional write down of goodwill” in Gibraltar of £8.6m which was written down to nil. 

Earlier this month the group announced the sale of its Gibraltar business for £10,000 as it said there were not enough lending opportunities to continue lending in the region. 

The company said the closure of the offices in Gibraltar and Guernsey would result in cost savings and an “improved focus in stronger markets”. 

It saw an operating loss of £4.7m, an improvement on a loss of £10.2m the year before. 

The expansion of its £75m funding facility with Pollen Street to £125m will help the group grow its loan book. The facility expires in 2026. 

Sancus said it was looking to reduce the cost of its funding in 2023, adding: “This has been challenging in the macro-economic environment of the year but remains a strategic objective. To address the movements in base rates across our markets, we have implemented variable rate loans with the margin pegged to the relevant base rate.” 

Rise in lending activity 

In 2022, the value of new loans written by Sancus Lending totalled £156m, up from £83m in 2021. It said this would result in a growth of loans under management and an increase in revenue. 

Its loan book expanded by 129 per cent in the UK market and 22 per cent in Ireland. Its offshore loan book contracted by 14 per cent.  

The overall loan book totalled £169m by the end of 2022, an 11 per cent rise annually. This comprised of £82m within its offshore business, down from £96m, £66m within its UK business, up from £29m and £21m within its Ireland business, up from £17m. 

Sancus Lending said: “We expect growth in the loan book to increase during 2023 as the newly written loans continue to be drawn.” 

For the year, the group revenue rose by 11 per cent to £10m. 

Return to profitability 

Rory Mepham (pictured), chief executive of Sancus Lending Group Limited, said: “After 18 months in my post as CEO, the turnaround of the business is on track and we are confident of our ability to deliver profitability. The business has undergone considerable restructuring and simplification during my tenure and we continue to be exclusively focussed on residential property lending in the development and bridging space, a market which remains underserved and offers significant growth possibilities.  

“During the year, we have carried out various cost optimisation projects in an effort to ensure that every pound of cost incurred is geared towards delivering growth.  

He added: “I am excited by the potential in the teams that we have assembled in the UK, Ireland and Offshore and believe that we have the basis from which to become ‘best in class’ in each of these markets.”