Last month NAB announced it would conduct a strategic review of Clydesdale and Yorkshire Banks following “increasingly difficult trading conditions”.
Potential results of the review include a sale of the banks by NAB or significant cutbacks in its operations with possible job losses.
Clydesdale in particular has a significant presence in the bridging sector, providing numerous credit lines to different lenders.
Mortgage Introducer is currently aware of five bridging lenders who have credit lines with Clydesdale Bank.
Christian Faes, managing director at Montello Bridging Finance, said that while Montello did not have a direct relationship with Clydesdale, he was aware that the strategic review had the potential to shake up the sector.
He said: “The sale of Clydesdale Bank from NAB will affect a number of lenders in the bridging space. Of the mainstream banks, Clydesdale is certainly the most heavily involved in our sector.
“What NAB does with Clydesdale will be intriguing and I’m sure everyone in the bridging industry will be keeping a close eye on what happens with the review.”
Andrew Bloom, managing director of Masthaven, said that the consequences from a sale by Clydesdale would be difficult to predict however it would have a limited impact in a worst case scenario.
Bloom said: “If the credit lines from Clydesdale leave the bridging market then I don’t think it would have a particularly material effect. Credit lines come and go and that’s normal in our business.
“That being said, some bridging lenders will be more adversely affected, particularly those that have just one or two funders.
“An analogy would be like an airplane and its engines. If you have four engines and one of them goes, then you’ll have another three to keep you going. If you only have the one and it dies then you’re in far more trouble.
“Thankfully Masthaven has several credit lines so we’re in a very secure position.”
Rob Jupp, managing director of Brightstar Financial, believed that a loss of funding from Clydesdale to the bridging market would hurt but the impact would be minimal.
He said: “Clydesdale are not as heavily invested in the bridging market now as they were a few years ago. The good news is that most of the cutbacks have already happened and lenders have been able to secure several more funding lines.
“Many if not all of the bridging lenders funded by Clydesdale will survive should the result of the strategic review be a withdrawal from the bridging market.”
A spokeswoman at Clydesdale Bank was unable to disclose details of the ongoing review but said: “NAB has commenced a strategic review and will work with UK management to appropriately reposition its business mix and structure for the changed economic environment and improve returns.
“We will inform the market of the outcomes of the review, which we expect to occur by the time of our interim result in May 2012.”
