Sancus Lending’s new loan facilities come to £83m in H1 2023

According to its interim results, the fall in loan origination was due to uncertainty in real estate markets along with inflation and interest rates.

The firm offers bridging and development loans as well as funding opportunities for high net worth individuals, family offices and institutional investors.

It added that all this together meant that it had been “more selective from both a credit and loan pricing perspective”.

The firm said that extension of the ZDP final entitlement date to 2027 and the extension of its Pollen Street facility would give it a “more stable base from which to grow when the right opportunities present themselves, in the meantime caution shall prevail”.

“Maintaining a high-quality credit process whilst cautiously scaling the quantity of new loans remains a priority. We expect to see ample opportunities to lend in each of our  markets and are confident that our businesses in these jurisdictions are well placed to execute as  suitable opportunities arise,” it explained.

The company’s loan book has remained flat at around £169m, which it said was a “reflection of robust credit discipline and a cautious approach to loan deployment, particularly in the UK”.

The firm added that it cut its headcount to 31 in the first half of the year, a decrease from 39 at the end of last year.

Group revenue stood at £5.4m in the first half of the year, up from £4.8m in the same period last year.

The company reported a group operating loss of £3.8m up from a loss of £2.1m in the same period last year.

Sancus Lending said that it continued to operate from three operating markets, UK, Ireland and offshore, following the sale of its Gibraltar arm earlier this year.

Offshore makes up 42 per cent of the current loan book, UK 39 per cent and Ireland 19 per cent.  Ireland is the fastest growing market with a 52 per cent increase in loans under management in the first half of the year, the firm said.

Looking ahead, Rory Mepham, chief executive of Sancus Lending said: “Whilst the outlook remains unclear, some of uncertainties present at the end of 2022 have now played out to a greater extent.

“For example, we have seen a series of rate rises from central banks during H1 and whilst some further incremental increases are possible, we are unlikely to see material further increases.

He continued: “In a world of asset price uncertainty the company remains optimistic that the residential property market will remains resilient, assisted by the perennial imbalance between supply and demand for housing across our target markets.

“A challenging dynamic remains but management have a clear plan to navigate the current market, avoid taking undue risks and be ready to take advantage of the opportunities that such times will inevitably present.”