RE: Net Assets Value12 Jun 2020 14:12
arps - can i politely refer you to beek's posting history circa. 01 March (about 10 posts).
https://www.lse.co.uk/profiles/rkbeekeeper/
For example:
"Commercial Lending:
In 2019 our Commercial Lending was about £3.5 billion. Now I have no experience of Commercial Lending and for the purpose of this post it could be Commercial Mortgages or Business Loans or start-up finance, at the moment I do not know as I would need to read several past reports in fine detail to fully understand what Metro Bank call Commercial Lending. What I do know is that I did not want to be a Mortgage Broker doing Commercial Lending and before a became a residential / B2L Mortgage Broker I was offered a job with a firm in Glasgow to be a Commercial Mortgage Broker but I turned it down because I knew then that commercial property was over-valued but I was totally blind to the financial crises that was about to unfold.
By its very nature Commercial Lending involves more risk so the Lender has to have tighter lending criteria to protect their money. So in the Mortgage analysis above I began with what was the “book” below 80% LTV and it was 85.54% of all residential mortgages. Then for the B2L Mortgages 98.2% LTV below 80% but for Commercial Lending I think we should use 70% LTV to get the proper comparison and that is 80.06% of the Book value or to put it in to context out of a Loan Book of £3.5 billion over £2.8 billion is under 70% of the total. At under 80% it is 86.29% of the total book and between 80% and 100% of the book value it is 8.77% or £90 million. Now there are £396 million that are over 100% which is 12.55% and before the shorters aim to shoot me down there are often stringent covenants and guarantees in place to protect the Bank like “pledging shares” etc so it is not a concern for me.
Now looking at some further information on Commercial Lending on Page 40 of the PDF file you see the various sectors covered and it is here were I discover that Real Estate lending is £2.4 billion or 66.95% of the £3.5 billion book.
I will only mention a few of the different types of Commercial Lending but you may want to see the full break-down. Hospitality 8.69% (I put this in because of Brexit and before the shorters try to jump on it) Construction 0.99% (tiny if all our European friends desert us or if there is a recession) and Retail 2.82% (well we all know that that is a struggling sector)
Now the good bit: Consumer Lending of over £3.9 billion the clients that are up-to date with their payments is 99.26% and the balance of 0.74% is between 1 to 29 days past their due date. So shorters have a job on their hands.
Conclusion: There is not a problem with Residential Mortgages, Buy-to-Let Mortgages or Commercial Lending, Metro Bank are good in fact very good at their risk assessment when they lend and they do not have the history of the older established Retail Banks."
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