MetLife builds lending team to exploit banks’ UK retreat

US insurer’s recruits include Barry Worth, formerly with Nationwide – one of many traditional lenders stepping back as new entrants gain strength

MetLife is expanding its UK origination team in a sign of the US insurance company’s determination to benefit from banks’ retreat from lending.

Barry Worth will join next month as a director of real estate investments to originate new business, working alongside director Gary Waistnidge. He will report to UK regional director Paul Wilson.

The insurance group has also hired Philip Colcomb to help manage the existing loanbook. Worth was one of between five and 10 people made redundant recently by Nationwide following  the building society’s decision to stop commercial lending on big deals and focus on small ones.

At Nationwide, he was a senior lending manager working in the London team on large deals. One of his last loans before the change in strategy was to Rowan Asset Management to finance its purchase of Aldwych House in Holborn.

The move reunites Worth with Waistnidge, who worked at Nationwide before moving to MetLife. Last month, Nationwide said it was moving into small business banking and would start lending to small and medium-sized businesses (SMEs).

The UK’s largest building society also decided to stop making large real estate loans and to cut  its £11.2bn commercial real estate book by £4bn- 5bn, sources said, mainly through run-offs. The building society is not expected to sell loans.

Mark Bampton, Nationwide’s head of commercial property finance, said: “The whole lending market is changing and you have to look at where you can operate best. Insurance companies and other funders are coming in, focusing on bigger-ticket lending and we have considered whether we wanted to continue to compete in that space.

“All traditional lenders are in the same boat, with additional capital requirements resulting from new regulations, while insurance companies’ capital treatment on commercial property is more favourable. So we have decided to refocus our lending on ticket sizes preferably up to £10m, as we feel there is a market there for us.”

Insurers are becoming a force in the market, having provided most of the largest loans so far this year. MetLife, M&G Investments, Aviva and AXA captured a 15% market share last year. Recently, Legal & General made its first loan and four or five other insurers are either ready to start lending or researching the market.

MetLife, which wrote more than £500m of business last year and is on target to lend more this year, said its general appetite for lending has not decreased. But other lenders said it has temporarily stepped back from assessing new opportunities while it processes its deal pipeline.

MetLife will continue to work with intermediary Laxfield Capital as another way to originate loans, but it is not an exclusive relationship. Laxfield will also work with Cornerstone, which is reviewing possible deals as part of its move into UK property lending, with capital initially from US insurance parent MassMutual.

This month Landesbank Berlin became the latest bank to announce that it is quitting UK property lending, by 2014. Liz Edwards, head of the London branch, has already left.

 

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