HAMPDEN & Co, which calls itself the UK’s newest private bank, has linked up with a mortgage distribution intermediary to help grow its share of the specialist market to provide home loans for high net worth borrowers.
The Edinburgh-based company is partnering Paradigm Mortgage Services as it looks to maintain the strong momentum it has built up.
The three-year-old bank already offers mortgages. However, the arrangement could allow Hampden & Co to access a much wider client base.
Paradigm operates as a mortgage club and provides a link between lenders and the clients of the more than 1,100 firms of advisers that belong to it.
Hampden chief executive Graeme Hartop said the partnering agreement was an important step for the bank, which could be followed by deals with other intermediaries.
“Approximately 75 per cent of residential mortgage business is via the intermediary market with many of these clients being high net worth individuals who don’t necessarily fit with high street bank’s lending formulas,” he noted.
“We therefore feel there is huge potential to help clients looking for a bank who can take their individual circumstances into account.”
Mr Hartop noted that Hampden employs people who have years of experience of dealing with the mortgage requirements of high net worth clients and who will be able to provide an efficient service.
Noting that Hampden offers a bespoke lending service, the head of Paradigm Mortgage Services John Coffield said: “There is an increasing complexity to many borrowers’ income sources – especially the case for wealthy individuals – and it’s important they work with lenders and banks that understand the need for a bespoke lending service.”
Hampden announced the agreement with Paradigm weeks after posting results for 2017. These showed it achieved strong growth in its second full year of trading on some key measures.
The number of clients increased to more than 2,000. The value of deposits increased by £50m to £195m while lending nearly doubled to £94m.
Mr Hartop said the bank performed well in the half year that concluded on Saturday.
“The bank’s been continuing to grow despite the fact there are quite challenging markets at the moment,” he said. “There’s lots of uncertainty out there.”
Client numbers have increased to more than 2,500.
The company has been recording good growth in both loans and deposits.
Hampden raised £15m from shareholders in February in a move that gave it increased firepower and reflected confidence in its prospects on the part of shareholders.
The bank had set out to raise £12m.
Asked about other business development plans, Mr Hartop noted that Hampden is developing its digital platform quite substantially. It expects to launch an app soon.
“There’s no compulsion about that; it’s about giving clients the chance to interact with us the way they want to but relationships will remain fundamental to what we are doing.”
Hampden & Co said it will pay what is knowns in the industry as a ‘proc fee’ to Paradigm for every completed piece of business without giving details.
The lender became the first private bank to launch in the UK in 30 years in 2015.
Chaired by former Adam & Co boss Ray Entwistle, Hampden & Co has 76 staff in Edinburgh. It also has offices in London.
Mr Hartop ran Scottish Widows Bank before joining Hampden & Co.
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