Shawbrook expands into first charge mortgages

The company said that on 22 May it bought £53m of first charge complex mortgages from a specialist mortgage lender, with whom it also inked a Forward Flow Agreement.

Company chief Steve Pateman highlighted how the transaction would give Shawbrook an insight into that market before it entered itself, organically, later in 2017.

Under the terms of the FFA, Shawbrook also committed to buy eligible mortgages from the originator for a year.

In parallel, Shawbrook also kicked off exclusive talks with a UK-based lender to buy a portfolio of commercial and buy-to-let loans.

The size of the deal had yet to be agreed but would likely exceed £300.0m and be accretive to returns, the company said in a statement.

If that second transaction was successful, completion and migration was expected to take place in the backhalf of 2017.

Commenting on the transaction and agreement, Pateman said: "Whilst this acquisition and Agreement will provide incremental returns, the primary rationale for this transaction is to further enhance the diversity of our product offerings to ensure the resilience, durability and sustainability of our business."