Steve Pateman

Shawbrook acquires £53m first charge mortgage portfolio




Shawbrook Group has announced the acquisition of a £53m portfolio of first charge complex mortgages ahead of its entry into that market later this year.

The group purchased the portfolio from a specialist mortgage lender, with which it has now reached a forward flow agreement obliging Shawbrook to acquire eligible mortgage loans originated by the company.

These loans – which are in line with Shawbrook’s current risk appetite – will be acquired on a monthly basis with an initial term of one year and rolling thereafter.

"The first charge mortgage portfolio is a perfect strategic fit for Shawbrook and allows us to gain insight into the complex first charge mortgage product set and market before entering organically later this year,” said Steve Pateman, CEO of Shawbrook (pictured above).

“The vendor shares our resolve to serve customers which are traditionally poorly served by mainstream lenders through a pragmatic, good-sense approach to lending.

“While this acquisition and agreement will provide incremental returns, the primary rationale for this transaction is to further enhance the diversity of our product offerings to ensure the resilience, durability and sustainability of our business.”

Shawbrook also revealed that it is in exclusive negotiations with a UK-based lender to acquire a portfolio of commercial and buy-to-let loans.

The exact size of the portfolio is yet to be determined, but it is anticipated to be in excess of £300m.

The loans are similar to Shawbrook's organically originated property finance portfolio and – while impacting the mix of total customer loans – are expected to be accretive to returns.

The precise impact would be dependent on the agreed acquisition price and the quantum of the portfolio.

If the acquisition is successful, the group expects completion and migration to take place in H2 2017.

“I am also encouraged by our continued ability to identify and deliver inorganic opportunities that are complementary to our business and enhance our returns capability, consistent with our stated strategy to grow through a combination of both organic and inorganic acquisitions,” added Steve.

Leave a comment