‘What we do is pass the Ronseal test – we do what it says on the tin’

By David Craik 6th March 2023

StreamBank is aiming to bring the human touch back to bridging after securing its full banking licence and joining the Bridging Loan Directory.

The Cardiff based group, currently offering non-regulated bridging and development finance, received the heart-warming news this Valentine’s Day that its application had gained approval from the Prudential Regulatory Authority and Financial Conduct Authority. Now it wants to build its business on the theme of being ‘Deliberately Human’.

“When a new bank comes to market it always seems to say that it is going to change the face of banking. That they are going to be different than anyone else and are going to get the most market share in a particular product,” says StreamBank’s chief commercial officer Richard Armstrong.

“That isn’t StreamBank. We are happy to declare that we are simply offering products which are already out there from a number of other providers. What we do is pass the Ronseal test – we do what it says on the tin and will deliver on our promises. We will set ourselves apart as a service, not just products, business.”

By this he means that the 30 strong StreamBank team, including three in the underwriting team, four in the lending team which includes three business development managers covering the Northwest, Midlands and the South, will develop personal and trusted relationships with brokers and clients.

“When a deal comes to us, we will be very clear with the broker about what our risk appetite is and what a StreamBank deal looks like,” Armstrong says. “So, when they send us a potential deal, they will be relatively comfortable that it is something we would consider.

We would go through that process as quickly and smoothly as possible and provide a quick yes or no. We see in the market a number of specialist banks as they grow in size become more vanilla in their bridging approach.

They like to get the perfect deal so they use algorithms and credit scoring and essentially take away some of the human element of underwriting. What we are trying to do is use the ability, knowledge and experience that we have in our team to make judgements.

More complex deals with more assets or charges involved need people to look at them. Yes, we use technology but we would never turn down a deal without a human looking at it.”

That experience extends back to around 2018 when Alex Pusco, the founder of global online broker ActivTrades decided to utilise some excess capital to create a bridging loan book. “He started with only one underwriter and one lending professional but they gradually started building up business with HNWIs, and developers both with residential and commercial work,” Armstrong says.

“The decision to form a bank was taken in July 2021 when we began the application process. A lot changed within the business then given the governance and the processes that you need to put in place to get approval. “

The reason why becoming a bank was so attractive to the team was to boost liquidity by bringing customer deposits in but also to help it build its existing loan book and explore other product options.

“As a privately funded business there were limitations in the deals we could do which were coming our way,” Armstrong says. “The activity and the demand fuelled our appetite to push into the bank because we knew that although the business was out there we were constrained from a cash perspective.

We had grown from a nothing base in 2018 to a loan book of just shy of £30 million but we couldn’t write any more business and get bigger.”

He is confident that now the full banking licence has been granted that the shackles will be off. Indeed, Armstrong believes it can grow the loan book to £120 million by next March and £350 million to £400 million within four to five years.

“We have ambition, but we want to keep control of that growth trajectory. We don’t want to grow too fast and lose that human touch,” he states.

At present StreamBank provides property finance solutions between £250,000 and £5 million, to support property developers, small and medium-sized businesses, individuals, and house builders.

The aim is to develop from that existing core base of unregulated bridging and development finance and add regulated bridging by approximately this April, and in time commercial mortgages and buy-to-let. It also wants to develop a range of competitively priced deposit products.

“We are seeing demand return after the economic and political upheaval last year. That and concern over rising building costs had held developers back,” Armstrong says.

“But, with some of that uncertainty gone and some building costs starting to come down, applications in the first quarter of 23 are certainly outpacing the fourth quarter of last year.

We are seeing that demand across the country both in residential and commercial.”

He believes banks are in a strong position as that business begins to bounce back. “We’ve seen a lot of non-bank lenders reliant on wholesale funding come out of the UK market.

It is meant that a number of customers have come to us mid-deal when funding has failed to materialise and have wanted us to provide that certainty of funding going forward,” he explains.

Being the customer’s saviour at the eleventh hour certainly helps build trust and name recognition in the market – vital for any new entrant. “Everyone on the team has between 10- and 30-years’ experience in property and specialist property,” Armstrong says. “We are a very lean team – purposefully built – with small lines of communication to help us make quick decisions. That helps us in those situations when developers need our urgent help.”

Joining the Bridging Loan Directory will help get its name further known in the marketplace. “We really want to showcase some of the things we are doing and are capable of doing. It will also provide us with a lot more information to help us better understand the market,” Armstrong states.

“We see plenty of opportunity ahead and we are all aligned and focused on that. Hopefully, we will see a successful start to Streambank’s life.”