The Financial Services Authority is only half-heartedly encouraging new lenders to the mortgage mar-ket, says Peter Birch, chairman of Home & Savings Bank.
Speaking at a banking conference in central London, Birch, who is also chairman of TrigoldCrystal and former chairman of Kensing-ton, says it takes a long time to get applications through the regulator.
He says: “The FSA is under huge pressure from the government and politicians to help increase lending but it is proving difficult.”
Responding to a question on whether the FSA is encouraging new lenders to the market, Birch says it is doing so half-heartedly.
Home & Savings Bank is believed to have applied for authorisation in May 2009 but is still waiting for approval. Birch revealed that the bank has £250m in funding with more in the wings.
But he accused building societies of not being forward-thinking and predicts there will be more consoli-dation. He cites Kent Reliance Building Society as a model for the future of societies. Kent Reliance received a £50m investment for 49% of the business by US private equity firm JC Flowers.
Birch says that Home & Savings Bank will take a conservative approach to lending, offering simple mortgage and savings products via the internet, phone and by post.
Private equity giant Blackstone is thought to be backing the venture with £200m from investors, with a further £50m provided by the Pears family. Martin Finegold, founder of Kensington, is listed as a director and is believed to be making a smaller investment through his hedge fund Cambridge Place Investment Management.
Meanwhile, at the conference, Metro Bank kept open the option of offering mortgages via brokers.
When asked if it would use brokers, Anthony Thomson, co-founder and chairman of Metro Bank, told the audience: “We wouldn’t rule it out.”