Clydesdale Bank to embark on mid-market broker lending spree

Clydesdale Bank, which has largely escaped the fallout from the banking crisis, has revealed plans to lend money to brokers.

The bank’s corporate and structured finance director, John Holm, said it was targeting the UK’s broking sector, typically mid-market brokers.

He said: “Our range of lending will depend on the quality of the business. We are not talking Aon or Marsh here, which are billion-dollar companies. Our starting point is about £5m, in terms of debt leverage.

“I am looking to do business. I have a healthy pipeline and I will look to convert that pipeline.”

Holm said the business, which is known as Yorkshire Bank in the north of England, had not got involved in risky investments and mainly lent from a deposit base.

He said: “It is a well-capitalised bank and has not been impacted in the same way as the other UK banks. It never got into subprime.

“Clydesbank funds lending from retail deposit and has a very strong parent in National Australia Bank.”

Earlier this year, Lloyd’s broker Windsor secured a deal to refinance its debt with Clydesbank.

Windsor’s management sealed a £33.7m buy-out from shareholders two years ago, paving the way for a delisting.

Clydesdale Bank took over from KBC as the broker’s main banker and has supported the senior debt refinancing.

Holm added that Clydesbank is also aiming to develop itself as a strategic partner to brokers, becoming a main bank and adviser.

Banks that received state support have a commitment to lend to UK businesses. Lloyds Banking Group has already stated its intention to help brokers with financial support.