Sancus Lending is looking property development markets for growth.
The alternative finance group said traditional banks remain inactive in development lending, which creates an opportunity for others.
“Whilst we have recently seen some increased competition from alternative lenders, the residential property supply and demand dynamic in all of our target markets remains favourable meaning that there is sufficient scale of opportunity for the business to achieve its growth objectives,” Rory Mepham, interim chief executive of Sancus Lending, said.
“With reasonable prospects for economic growth in the remainder of the year and thereafter, it is expected that there will continue to be favourable underlying market fundamentals for the foreseeable future.”
It comes as the Aim-listed alternative finance group posted an operating loss for the first half of 2021 of £4.1m, attributed to increased lending costs and credit losses.
The company said it wrote new loan facilities worth £53m in the first half of 2021, compared with £50m during the same period of 2020, incurring £1.7m of transaction fees.
Expected credit losses increased from £200,000 to £3m.
Sancus Lending said loan repayments have been taking longer to complete over the past eighteen months due to market conditions.
“The underlying loans however have not seen a material deterioration,” the update said.
Sancus Lending Group has rebranded from GLI Finance and has been simplifying the business into four main areas: origination; co-funding or loan management; finance; and operations, with a bigger focus on property finance.
Andy Whelan stepped down as chief executive in July and Mepham is standing in on an interim basis.
“The past eighteen months have been highly dynamic and it is our expectation that the outlook will continue to provide both opportunities and challenges,” Mepham said.
“Reduced willingness of traditional lenders to participate in the residential development and bridge lending space has offered Sancus the opportunity to increase the speed of our growth in the target expansion markets of Ireland and the UK, and continue to grow the offshore markets, whilst at the same time various Covid related factors have continued to delay our exit from a number of historical loan positions.
“As we navigate our path through the expected recovery, we remain confident that the business is in a strong position from which to grow.”