The value of shares in Barclays has fallen by over 4% in trading today, following reports that its exposure in Market Financial Solutions (MFS) may total £600 million.
Meanwhile, according to Bloomberg, other lenders including US-based Jefferies, Wells Fargo, Castlelake and Atlas SP Partners, as well as Banco Santander, may also have significant levels of exposure to the London-based short-term lender, which entered administration earlier this week.
However, Reuters has quoted an analyst from Citi who advised caution with the headline figure, as it is common practice for banks to sell on a proportion or all of their exposure in such loans.
Citi said: “Arranging a loan is very different to retaining that risk on B/S (balance sheet).
“Also not clear if/how much could already be provisioned against (if anything).”
Bridging Soup approached Barclays when news of MFS’s application to enter administration was made public last weekend, but so far has not received any comment.
HIGH STANDARDS
Meanwhile, the Bridging and Delelopment Lenders Association (BDLA), has once again sought to reassure the sector about the market’s stability as a whole.
Adam Tyler, CEO of the BDLA, says: “As the trade body for bridging and development lenders, the BDLA is aware of current commentary regarding a small number of lenders in the sector at the present time.
“Our view is that it is not reasonable for us to comment on individual firms whilst matters are under review. We are focused on the continued stability of the wider membership and the protection of the whole industry’s reputation.
“Our industry is built on resilience and liquidity. Despite the operational challenges that can arise in any economic climate, the sector remains strong, vibrant, and ready to lend. The BDLA exists to champion the professionalism and high standards that the market expects.
“We are here to support our members and ensure that the bridging sector remains a trusted, transparent, and effective route for finance. Our priority remains the health of the market and the delivery of excellent outcomes for every customer.”
