The concept behind the dual launch of Cheltenham & Gloucester’s intermediary arm, C&G for Intermediaries, and its inaugural sub-prime mortgage range epitomises the type of challenge Mark Blackwell has been striving for in his career for some time.
Blackwell has spent 21 years in the mortgage market working in a range of roles in the mutual sector, most recently as marketing manager for the Derbyshire where he was instrumental in setting up the society’s specialist lending arm, Salt.
“Most businesses tell you they’re going through lots of change and believe me, things needed to change at the Derbyshire,” he says.
“It recognised that to remain independent as a regional mutual it had to find what it stands for in terms of its customer offering.”
Blackwell says he revitalised the Derbyshire’s 52-branch network while simultaneously helping launch Salt.
“It was not just a toe in the water exercise but a significant part of its growth strategy to provide a launch pad for the business to not just focus on residential intermediary-introduced mortgages but also to enable it to get into other areas – mainly commercial finance,” he says.
Blackwell resigned from the Derbyshire last November with the intention of pursuing a new position – a decision prompted by Salt’s focus on commercial finance which is an area of the market in which Blackwell lacks both interest and experience.
Specifically, he yearned for a role that was focussed on the intermediary residential mortgage market.
“That’s where I find it most exciting,” he says.
“Six or seven years ago it was a pretty anodyne marketplace but there are so many things going on now that not a week goes by without a structural change.”
Blackwell drew up a list of potential employer targets and C&G was one of them, along with Alliance & Leicester and HBOS.
“I was looking for a role at a larger lender to experience scale and have the opportunity to develop something that was more prominent in the marketplace,” he says.
The desire to work for a plc was key for Blackwell, who says he had served his time working in the mutual sector. He started in the industry in 1986, running a small branch for Leeds & Holbeck in north London. He left to join Skipton, helping to roll out the mutual’s brand in the Midlands and the South-East through strategic partnerships.
After 10 years he joined Portman as group mortgage manager, running its Bournemouth-based lending operation and integrating Sun Bank, which Portman acquired in 2001 and rebranded The Mortgage Works. But the success of his integration work led to Blackwell being made redundant after his role was subsumed into the newly integrated business.
He went to work for Staffordshire in 2003 and, ironically, found himself back with Portman when it acquired Staffordshire later that year.
Portman’s takeover approach to Staffordshire led to Blackwell having the dual role of helping with the prospective merger and building Staffordshire’s mortgage distribution platform – his original remit – in case the merger didn’t go through. Again, Blackwell’s merger success resulted in a redundancy package.
Blackwell’s C&G appointment was similar to his former placements in terms of him being in the right place at the right time.
After indulging a month’s gardening leave in record-collecting (particularly Northern Soul) and project managing work on his house (involving “hanging around while professional builders got on with the real work”), Blackwell, fast approaching his 42nd birthday, was on the verge of taking the next substantial step on his career ladder.
“I’m a man in a hurry,” he says. “I didn’t want to spend six months gazing at my navel – that’s not the sort of pastime I get excited by.”
His search was cut short when Blackwell was approached by C&G intermediary sales director John Champion, who pitched him the role of head of corporate and specialist intermediary sales with responsibility for the lender’s entry into the sub-prime mortgage market while ramping up its corporate intermediary proposition.
The offer matched well with Blackwell’s desire to work for a larger scale player but the cloud under which it was subsequently rolled out was not something for which he had planned.
As Mortgage Strategy Online exclusively revealed on March 13, the lender launched C&G for Intermediaries, an intermediary-focussed arm, at the same time as unveiling its inaugural sub-prime mortgage range amid a wave of criticism about C&G’s service. According to one broking source, it has declined from best in the market to the worst over the past year.
The culprits – two two-year and five-year fixed rate deals allegedly left on the market for too long – coincided with Blackwell’s arrival at C&G in January.
“C&G had 12 years’ service award recognition but you are only as good as the last award, and we know the early part of this year has been a challenge from a service perspective,” he says.
Blackwell says C&G responded by redeploying staff from around the business to deal with the backlog of mortgage applications caused by the aforementioned fixed rate deals.
He refutes allegations that C&G got it wrong by making the deals available for too long. Nevertheless, timing is arguably not the lender’s strong point, with brokers now criticising its late entry into the sub-prime market.
This lateness means it has joined during a weak part in the mortgage market cycle, with personal debt levels at an all-time high, consumers’ attitude to debt increasingly lax and possible interest rate rises ahead.
Moreover, sub-prime competition is fierce, with the latest entry from Coventry’s Godiva Mortgages on the tail of C&G’s proposition (Mortgage Strategy Online March 21) and edeus not yet one year old.
But Blackwell says C&G’s launch is an extension of its existing specialist mortgage range such as its buy-to-let deals, not a new entry. At the same time, he’s convinced there’s a need for C&G’s sub-prime offering.
“There are a lot of brokers with clients who five years ago had pristine credit records and, through no fault of their own, now have a records that are more diverse,” he says. “But they still want to borrow from a reputable brand and a mainstream lender.”
C&G may be a reputable brand and the UK’s third largest mortgage lender but it is only now that it has unveiled its new propositions that it seems to have won the support of parent, Lloyds TSB.
There has been speculation for some time about whether Lloyds TSB, which acquired C&G in 1995, would retain the C&G brand and its branch network or subsume it within the group. This was a concern for Blackwell when he was considering Champion’s proposal.
“I was weighing up whether C&G was in it for the long run,” he says.
“You only have to look at the likes of Jon Pain, our managing director, who has a great pedigree in the mortgage market. It’s rare to see someone with such enthusiasm and focus.”
With C&G’s sub-prime launch complete, Blackwell will now focus on the second strand of his remit – developing corporate intermediary accounts.
“We will look at the sales structure to ensure it’s fit for purpose so I’ll be searching for quality account management,” he says.
C&G has two key account managers looking after 20 accounts, and 90 BDMs.
“I don’t see the BDM number de-creasing,” says Blackwell.
“The thing is to make sure that the right linkage exists between conversations we have at a strategic level with our corporate accounts and communicating that to the ground level.”
Accordingly, he expects to boost the number of key account managers.
“We’ve got to deliver value to corporate relationships,” he adds.
“We are delivering the right things but do we move relationships forward? Probably not. That’s why I’m here.
“We need to talk about exclusives for certain distributors,” he adds.
But the cultural difference Blackwell will encounter in a plc compared with his mutual past may present challenges, not least because of C&G’s size. For example, decision-making is likely to take a lot longer.
If true, the culture shock could be a problem for Blackwell who envisages a good few years with C&G. Who knows, if he applies the same level of diligence to this venture as he has with his previous quests, he may get his wish.
Then again, given that his past diligence has tended to result in redundancy, it may be premature for him to get his feet under the C&G table just yet.