Portillion pulls the plug on lender ambitions and lays off its 20 staff

Portillion has given up its bid to become a lender, five years after former GMAC-RFC chairman Stephen Knight launched the firm.

Mortgage Strategy revealed in March that the company had withdrawn its application to the Financial Services Authority for a banking licence and was looking at its options.

But Portillion’s board announced last week that it has closed its Farnborough office and all 20 staff have been made redundant.
It did not comment on the reasoning behind it abandoning its lending ambitions.

Alan Cleary, managing director of Precise Mortgages, says gaining a banking licence is no mean feat, as firms granted a licence are covered by the Financial Services Compensation Scheme in case anything goes wrong, so they have to prove adequate funding is in place.

Cleary says: “The FSA has raised the bar and no lender has entered the mortgage lending space in the past 12 months.

“Only two companies have received authorisation to offer mortgages since the credit crunch – us and Metro Bank.”

He adds that to launch into the market firms need substantial resources behind them.

Knight launched the firm in 2007 under the brand Checkmate Mortgages. It rebranded to Portillion in February 2010, a year before Knight stepped down because he had a brain tumour.

Portillion originally set a launch date of January 1 2012 and planned to offer a range of savings products direct and mortgages via brokers.

It had secured more than £58m in investment from SBI Group of Japan.