Based in Skipton, Baseline has turned a new set of EU regulations on capital adequacy into a business opportunity, by offering a comprehensive technology solution incorporating a pooled data warehouse service.
New regulations coming in on 1 January 2007 will change the way mortgage asset risk is assessed, offering two ways in which deposit takers can calculate their capital reserves – Standardised and Internal Ratings Based (IRB). The significant benefits of the IRB approach bring with them the technological problems of supplying sufficient quality data which meets the stringent criteria laid down by the Financial Services Authority to obtain regulatory approval. To overcome this, Baseline offers clients a way to pool mortgage data, giving them wider access to comparable loan data, and so allows them to comply with the new regulations. Baseline’s target clientele are UK lenders, principally banks and building societies; Skipton Building Society and its specialist-lending subsidiary, Amber Homeloans Limited, together with a number of other societies have already signed up for the Baseline service.
Richard Coates, managing director of Baseline, commented, “We are delighted with progress to date. The new regulations will bring increased competitive pressure on UK lenders. By using the technology available from Skipton’s other subsidiaries, we are able to offer retail banks and building societies the solution to be able to compute their IRB credit risk capital calculation. With full data capture across their mortgage books, we will be able to offer our customers detailed analyses and reports which will predict the risk of default, and hence the likely losses, in their mortgage asset portfolios.”
The members of Baseline’s management team bring with them a wealth of experience of the industry and of the Skipton Group. Richard Coates, managing director, joins from KPMG’s financial services practice, whilst Gary Styles, commercial director, joins from HBOS. Knowledge of the Skipton Group comes from Claire Jessop, senior business analyst, and Keely Johnson, finance director, who have worked for a number of Skipton’s other subsidiary companies.
Baseline’s inclusion in the Skipton Group takes the total number of subsidiaries to 17 and further enhances the Society’s strategy of ‘modern mutuality’, through which its members can enjoy additional and sustainable long-term value.
John Goodfellow, chief executive and director of parent company Skipton Building Society, added, “Baseline brings yet another key area of expertise to the already buoyant Skipton Group. Skipton is recognised throughout the industry for its successful, innovative and diverse approach to business and members are reaping the rewards, both directly and indirectly. It will offer UK lenders, especially the small and medium sized institutions, a valuable and cost effective service. I would like to take this opportunity to welcome Baseline to the Group.”
