Consultant Zone

The importance of Securitisation in non-bank lenders’ strategies

The importance of securitisations for challenger and non-bank lenders is well known and has been the subject of much of our commentary this year.  There are number of sessions where the subject will be debated at this year’s Global ABS being held in London on 27 and 28 September 2021.  We are exhibiting there – come and meet us.

It has been a successful year for securitisations as the recent posting of one non-bank lender’s accounts confirm. While traditional bank and building societies have benefited from the generosity of central bank stimulus in the form of funding schemes, such as FLS, TFS, and TFSME, challenger and non-bank lenders have not been in such a fortunate position.

At the start of the pandemic this may not have been an issue for non-bank lenders as most adopted a cautious approach when the housing market was effectively shut. As we know, millions of employees were furloughed and millions of borrowers were taking payment holidays, so the importance of long-term financing solutions and to a certain extent development activity was suspended as the market went into ‘stall’ mode.

Once again however, the housing sector showed its resilience, surprising several commentators. Q2 lending was the highest quarter performance since 2007, and the non-bank lenders added scale quickly, backed up by healthy levels of securitisations. As an example, just one non-bank lender has raised or refinanced over £1.3bn in five transactions during its financial year.

Rockstead has been providing independent asset, business, and process reviews to a wide range of financial institutions involved in the securitisation process since 2008. Our Agreed upon Procedure [AUP] engagements provide specific work streams that cover clients’ areas of concern in a focused manner.

We will be happy to discuss the active securitisation market, our AUP services and other RMBS issues on our stand at Global ABS 2021. If you are not attending that event, give us a call to see how we can help, whether an originating lender, funder, or purchaser.