Recognise Bank plans to underwrite £250m of loans by March 2022

Recognise Bank aims to underwrite around £250m in new loans by this time next year, revealed its CEO, Jason Oakley, in a filmed interview with B&C.

In November 2020, Recognise Financial Services was granted authorisation with restriction to become Recognise Bank.

It announced it would begin selective unregulated lending during its soft launch phase, in which it is lending its own capital, before gearing up to full operational activity in H1 2021.

Recognise Bank has initially gone to market with products for bridging, commercial property, and working capital loans for SMEs, commercial property owners, and professional practices. 

Once it removes its deposit restriction — which it is on track to do in Q2 — it will also introduce a professional BTL offering.

It will also launch an asset finance product in early 2022.

Regarding bridging, Recognise Bank aims to service quirky deals that are non-standard and require structuring. 

Since November, Recognise Bank has seen over £333m of enquiries, spread across its unregulated products, with a bias towards commercial real estate.

“This is far in excess of anything that we anticipated,” Jason divulged.   

The response suggests that there are certain secured loan markets constrained in terms of supply of credit, he added. 

The bank was also surprised with the quality of the borrower; enquiries were for bigger ticket sizes and from larger businesses with strong balance sheets.

“As a new bank entering the market, you do tend to find that brokers blow the dust off of deals and say, ‘Well, have a look at that one’ but, thankfully, our experience has been somewhat better than that.”

During soft launch, the lender set itself a goal to have loan assets of £20m by the end of its financial year (March 2021).

Jason believes this set quite a pace, “because most of our competitors, when they get their interim licence, don’t lend for many months because they’re building up their IT; ours is all built.”

For the period to March 2022, Recognise Bank aims to underwrite around £250m in new loans, spread across all of its product lines.

“We’d expect bridging to be circa 10% of our book,” Jason estimated, with the majority expected to be in commercial real estate and professional BTL.

He highlighted that the bank has already been able to deliver bridging loans in less than a week and commercial real estate finance in less than one month.

“We are not doing it at the expense of speed.”

In the short space of time the bank has been up and running, it has started transacting with 40 brokers.

“Brokers will always be very important to us,” Jason said, noting that it would continue to build its networks in the regional communities it is serving, and those into which it plans to extend its offering.

Currently, Recognise Bank — which has its operations team based in the Midlands — has hubs in London, Manchester and Leeds, and will soon open another in Birmingham.

“Those centres are where there’s real economic growth and vibrancy,” he commented.

Jason revealed that, in 2022, the bank will be looking at expanding into Bristol, east Midlands, Milton Keynes and Newcastle.

“We will continue to build a distribution where we can serve a region with intimacy, access and responsiveness — that’s so key.”

The full interview can be watched below.

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