RateSetter offloads £167m property development loan portfolio to Shawbook Bank

In a surprise move this morning, Shawbrook Bank announced that it has acquired RateSetter’s £167m property development loan portfolio, as well as the lender’s development finance team.

RateSetter, which was acquired by Metro Bank earlier this year, said the sale would also coincide with the closure of RateSetter’s 1 Year market, primarily used to fund these loans, on 15 January.

“This transaction demonstrates the enduring quality of RateSetter’s loan assets,” RateSetter’s chief commercial officer Peter Behrens said of the deal.

“I am pleased that our property finance team can go to a new home where they will complement the Shawbrook team and continue to grow the franchise they have built.”

The transaction is also clearly a decision by Metro Bank to shift development finance from RateSetter’s loan book.

From Shawbrook’s side, Terry Woodley, managing director of the bank’s development finance business, said the transaction would add more than 100 new active clients to his portfolio.

“This is a fantastic acquisition and one that complements our existing development finance operations,” said Woodley.

“Our ambition is to become the UK’s Specialist SME Lender of Choice. By applying our specialist lending principles and high levels of service to an immediately adjacent segment of the development finance market, where loan sizes typically start at £1m, we fully expect the acquisition of the RateSetter business to quickly deliver both scale and synergies.”

With the RateSetter deal complete, Shawbrook says it now expects to surpass £1bn in total development finance facilities in early 2021.