Santander changes regional focus in real estate shake-up

Five regional real estate teams formed to work alongside large loans unit

Santander has restructured its regional lending operation, creating a centralised property lending business to run alongside its wholesale large property loans unit. Susan Geddes will continue to run the wholesale real estate business, reporting to the bank’s managing director of corporate banking, Mike Ellwood. Scott Stuart has been promoted to managing director of real estate finance, leading five new regional real estate teams,  reporting to head of commercial banking Marcelino Castrillo.

Castrillo and Ellwood report to Steve Pateman, head of the UK corporate, commercial and business banking operation, who was recently promoted to the UK main board. The bank had considered creating a new ‘super-head’ of real estate, but Geddes said the option had been dropped. Previously, real estate teams in the regions reported to regional banking managing directors who were not property specialists.

Geddes said that as part of the restructuring, the cut-off point for loans handled by each real estate unit has changed. Her team works with large property clients with aggregate loans with the bank of £75m or more – previously the figure was £25m. The unit also deals with  loans where “there is a level of complexity, although we are  still not seeing many structured transactions,” said Geddes. “Out of 15 deals we have done this year, only two involved mezzanine.”

Stuart said the regions will now act “as a coherent body and focus on small and medium-sized clients” for property lending. The wholesale property business lending target this year is £1.2bn. The bank has done the same thing with its public finance and infrastructure book, which includes loans to clients in the education, healthcare and social housing sectors. As with the property operation, the regional teams in this area have been centralised as a key asset class, under Steve Brooks. The number of regional divisions within the asset classes are expanding from three to five. Stuart is recruiting for property heads in the Thames Valley/South West, and Scotland/Northern Ireland/North East England areas.

The restructuring is the second in less than two years as part of the bank’s expansion, and was completed after the departure of chief executive António Horta-Osório and other senior directors, to Lloyds Banking Group. Santander is preparing to integrate over 300 RBS branches. Kevin Boyd, previously corporate head of real estate for Clydesdale and Yorkshire banks at National Australia Bank, has joined Santander in a non-real estate role as the MD of commercial banking for Scotland, Northern Ireland and North East England.