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Brokers urge Co-op to adopt C&G’s underwriting approach

Brokers are hoping the Co-operative Bank will adopt the flexible underwriting approach that Cheltenham & Gloucester was well known for after the mutual’s parent group sealed a deal to buy 632 Lloyds branches.

This week, the Co-operative Group announced it will pay an initial £350m for the Project Verde branches and up to £400m based on the performance of Co-op’s combined banking business until 2027.

The deal will see Co-op take over the Lloyds TSB and C&G brands by November 2013. Lloyds will rebrand all 632 branches as TSB in the third quarter of 2013.

Brokers want Co-op to adopt the flexible underwriting approach C&G used before Lloyds moved to a more homogenised approach across its brands.

Lentune Mortgage Consultancy director Stuart Gregory says: “One of the key strengths of C&G’s lending was it was common sense lending, it was individually underwritten. If Co-op moved to that type of approach, it could make great strides in the market and borrowers would benefit.”

London & Country associate director of communications David Hollingworth says: “C&G used to have a flexible approach to underwriting and if you go far enough back, individual branches used to have mandates to approve cases, which was very good.”

However, some brokers believe Co-op could loosen its existing ties with the broker market because of a desire to get customers into its branches. Co-op does have an intermediary brand, Platform, but it does most of its lending in the buy-to-let sector, although it has a small selection of mainstream and near-prime products.

Coreco director Andrew Montlake says: “I think Co-op is less likely to use brokers now that it has a big branch network to service, which is a shame.”

A Co-op spokesman says: “It is too early to say how the deal will impact on our mortgage lending.”


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There are 4 comments at the moment, we would love to hear your opinion too.

  1. I can think of many cases where i have asked the bank to change their lending criteria and they have – NOT.

    C&G Do not deal with Brokers, so why rant on wanting the criteria changed!!

  2. I can say that having worked for C&G while the flexible criteria was available, this only caused more work for the branch.

    Each and every broker insisted on a change to the policy to benefit each client. This sounds great from a customer point of view with a nice personal service but is a nightmare for the staff in a branch.

    Better to have a standard approach so as to ensure everyone is treated fairly.

  3. I fear the worst with the Co-0p taking over the TSB.
    The CIS has closed because there management could not run a piss up in a brewery!
    Will the bank be any different?

  4. What a brilliant idea Mark. Turn the branches into pubs! Well it worked for Wetherspoons!

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