A MIGHTY OAK
Lender that is setting sights on helping region recover after the pandemic
THE PANDEMIC might be forcing many firms to focus on survival but nothing, it seems, can halt the progress of OakNorth Bank, which is planning to establish a base in our region.
The lender’s sights are set on providing the fuel for a rebirth of Yorkshire’s real estate market once the world returns to something approaching normality.
In recent years, OakNorth has lent a quarter of a billion pounds to businesses in the North of England, despite the uncertainty caused by Brexit and the pandemic.
According to Ben Barbanel, the head of debt finance at OakNorth Bank, there are plenty more deals to be done, which has strengthened the case for establishing a permanent office in Yorkshire.
“Leeds is a huge potential growth area,” said Mr Barbanel, “We are passionate about helping with the national housing shortage.”
The bank has hired James Espley, who lives locally, to lead its lending activity in the real estate market in Leeds.
Mr Barbanel said: “He has really started to get the message out there that we have started to pump money out into Leeds and the surrounding areas.
“We hope to hire a couple more people and then open an office in Leeds or somewhere in Yorkshire.”
OakNorth has continued to fire on all cylinders during a period of upheaval.
Mr Barbanel said: “We have continued to hire in our Manchester office even during the lockdown.”
Mr Barbanel leads a team which, since its launch in September 2015, has transacted more than £4bn of loans across hundreds of deals.
He’s an experienced, and well connected, financial services professional.
Before joining OakNorth Bank, he spent almost six years at Santander Corporate Bank, where in his most recent role, he was the divisional head of business development for London and the South East.
Prior to Santander, he was at Clydesdale Bank where he focused on real estate finance. He also spent time working in a privately-owned real estate business helping to source, arrange, and manage debt.
He clearly relishes the expansionist approach of his current employer. OakNorth Bank’s loans have helped to build 13,000 homes and 17,000 jobs in the UK and it has raised deposits from around 145,000 savers.
Although he has a national perspective, Mr Barbanel is acutely aware of Yorkshire’s inherent economic strengths. In particular, Channel 4’s arrival in Leeds is expected to bring a host of opportunities.
“Any influx from a major employer like Channel 4 is a signal there will be further demand,” he added,
“It’s hoped an office in Leeds or Yorkshire could open next year. I would call myself a realist in terms of the economy. There are smart entrepreneurs who will always look for opportunities.”
OakNorth’s growth really took off as the political world was transfixed by Brexit.
“After the vote on Brexit, a lot of lenders froze,’’ he said. “We put a stake in the ground and grew significantly.
“We moved quickly because we didn’t have legacy issues around bad deals.”
To date OakNorth has supported more than 750 businesses across the UK with the debt finance to help them grow.
A number of Yorkshire entrepreneurs have reasons to be grateful.
In January 2019, OakNorth provided a £2.8m facility to the hoteliers, Simon Rhatigan and Simon Kershaw, who used the capital to launch a new boutique hotel brand – Bike and Boot
– starting with the acquisition and conversion of a hotel in Scarborough.
The duo acquired the 50-bedroom, Grade II listed Mount Hotel in Cliff Bridge Terrace, and refurbished it, increasing the number of rooms to 59 by converting a nearby fivestorey townhouse, which they also purchased.
They plan to open four hotels under the new brand, with their second site, a newbuild 80-bedroom hotel in the Peak District expected to be completed this year.
Oakbank also completed a debt finance deal of £22m with Newby, a property development company based in North Yorkshire, which has a large planning and development pipeline.
The finance was been used to acquire and develop Ryedale House – an eight-storey vacant office building close to the River Foss and Clifford’s Tower.
No enterprise can escape the impact of the pandemic and the route out of the crisis is far from clear.
Mr Barbanel added: “We are still at an early stage in terms of this latest issue we are facing. It’s very different to the last cycle. It’s not a banking liquidity crisis. The impact on the supply chain is huge.
“It’s unlike anything we have ever faced before. As the Covid-19 pandemic started to emerge, we came up with an index to look at how each sector is faring, so we were ahead of the game from day one.
“We shared these understandings with our customers,” he added,
“A lot of our customers value the support from the bank, but also the intel into the market.
“The Government has done tremendous work to support the economy during the pandemic. I can’t see how the Government could have done better for SMEs (small and medium-sized enterprises). But we are in a bit of a short-term bubble.”
Once the uncertainty lifts, OakNorth Bank aims to be on hand to help dynamic entrepreneurs achieve their dreams.
The fact the lender aims to build an operation in Yorkshire is further evidence of our region’s long-term growth prospects in the post-pandemic world.
We moved quickly because we didn’t have legacy issues around bad deals.