CLYDESDALE Bank has withdrawn its funding for the renovation of a listed building in Burns country after the transfer of the bank's commercial real estate portfolio to parent National Australia Bank in Melbourne.
The B-listed mansion Dallars House in Hurlford was inherited 18 years ago by Iain Richards and his brother, and the family's bank the Clydesdale helped fund a £250,000 renovation and flat conversion project for the upper floors backed by Historic Scotland.
In July last year, the bank agreed to lend a further £115,000 to enable the ground floor to be renovated, signalling that a one-year development loan would convert to a 10-year fixed term in August 2012. But this summer, the bank changed its mind, and warned that it would call the loan in after a three-month emergency extension, which was due to expire this week.
Mr Richards said: "Last week, over the course of several phone calls, they have finally told me the best we will get is six months. The explanation I have been given is that NAB Group is restructuring its balance sheet because of elements of 'toxic assets' within its commercial property portfolio.
"I appreciate that I am just a minnow in this ocean of financial chaos, but this uncertainty and shifting of goal posts is causing me great stress."
Dallars House is valued at £700,000, yet the bank is now calling for a formal valuation – at a cost to the borrower of more than £1000 – to establish it is sufficient security for the £115,000 loan.
Mr Richards said the bank had required him to change a personal account to a business account, had categorised the loan as commercial, and had then said there was a problem because he had "no history" in the account.
He said: "I have had an account with the bank since I was 17 and I am now 53. The bank manager concerned has been very helpful but she told me she has been made redundant and leaves in December."
He added: "I am an individual. I don't employ anybody and I am trying to write a book. My partner and I are planning to set up a B&B in the house. I have rearranged my life in many respects in order to save this property."
Mr Richards has now written to his local MSP, Cathy Jamieson. He said: "I have banked with the Clydesdale Bank for more than 36 years and, for the whole period of loans relating to Dallars House since 1996, not one payment has been missed or late.
"If I had been aware in June last year of the fragility of both the NAB Group and the Clydesdale Bank we would not have asked them for these funds. My brother and I have fulfilled our side of the bargain but have been badly let down by the Clydesdale Bank. What use is a bank that refuses to lend money?"
A spokesman for Clydesdale Bank said: "We never guarantee future lending as these decisions are dependent on the circumstances at the time of application. Our withdrawal from the commercial real estate market was a strategic decision, not a reflection on particular customer relationships."
The bank said last week it only affected "commercial real estate customers, not people who happen to have a property they use for their business".
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