Bob Sturges, director of communications at Money Partners, admitted he had noticed a change in attitude among US investment banks for UK adverse portfolios.
He said: “Over the last two or three weeks, I have noticed a definite tightening in attitudes and the appetite for adverse products. Many have been burnt in the US and they are now looking at any non-conforming products with caution.”
Sturges insisted that there were no signs of any players walking away from the market but lenders who securitised would feel the impact of this shift over the next few weeks.
“If banks tighten their attitudes, it will filter through to lenders and that will put pressure on margins. This will mean one of two things: higher pay rates, but who will break ranks first in such a competitive market, so it is more likely we will see higher fees, especially arrangement fees.”
Mark Sismey-Durrant, chief executive of Heritable Bank, believed the fact US banks were struggling to cope with events at home would filter through to their appetite for UK portfolios.
“The nervousness is definitely coming across. Bear Sterns has had big problems with its bonds and the fact it is in such bad shape and no one has been able to rescue it shows there is more bad news from other players on the way. Therefore, it will be interesting to see the appetite of US banks over here. There are no signs yet of them backing off and things would have to get a lot worse for that to happen. However, it shows the benefit of lenders having more than one funding stream.”
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