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CV: Mr Hunter joined Norwich and Peterborough Building Society in January 2001 as national development manager. He was previously a navigating officer in the Merchant Navy. Prior to joining Norwich and Peterborough, he was a regional manager at Alliance & Leicester and development manager of Melton Mowbray Building Society.

MA: How did you move into your current role?

SH: I have been with Norwich & Peterborough for seven years. I was sought out to be national development manager. I did that for a while and then a decision had to be made about whether we would grow the intermediary business or leave the market. It was quite clear there was potential for the future so the board decided to develop an intermediary business and chose me to head it up.

MA: What were you tasked with doing?

SH: The role involved setting up and using the existing framework of managers out in the field. We cover seven regions in England and Wales. We also set up a broker contact centre called our intermediary sales team or IST for short, I like my three letter acronyms.

I also looked at our exclusive products and relationships with distributors, a task that took a couple of years pre-regulation. We are very well represented on lending panels of major mortgage distributors like Legal & General and Openwork. A lot of our peer group had not managed to achieve that degree of distribution in the market. We were well placed when regulation started. Really we have never struggled to lend our money. We did that by having good, close working relationships with the distributors.

Our intermediary business is down to the distributors and the help they have given us in recent years. If it had not been for advisers our business would not have grown to where it is today. We owe them our thanks and we wish to show them our support even now when times are more difficult. We are trying to honour that relationship as much as we can.

MA: While others are turning their backs on intermediaries and focusing on direct sales, Norwich and Peterborough launched Astra, its intermediary lending arm. What was the reception like for this business?

SH: We made the decision several years ago that we were going to go for it and we put our plan in place. Technology was a key element and we were one of the first to develop a proper online trading platform known as Project Electra. That allowed advisers to submit applications straight to us and we also linked in to sourcing systems like Trigold. Prior to that it was only the major players that had that electronic support. Clearly we could not have seen what is happening in the market today occurring when we started the project. We decided just to continue with it as we have money to lend. We are lending and we will hopefully lend more money this year than we did last year, which is a good story. Our Basel II accreditation is also a major feather in our cap. Basel II was really intended for the major lending institutions to use but we saw that as something we could get into. We have a very strong risk area in our organisation. We were the first in Europe to be given the Basel II waiver.

MA: Do you expect your competitors to follow you in getting a Basel II waiver? Are you surprised more have not sought this waiver already?

SH: More will. I am expecting more competition. The situation we are in at the moment I do not see it as a long-term situation. The market will come back and lenders will develop their own online system. This delivery of pricing for risk will be a key element going forward. We have already seen it in the insurance sector. I am expecting more competition but it does give us an edge for quite a while.

MA: Do you think advisers understand Basel II? How will you educate them about what benefits the Basel II waiver have brought for N&P and Astra?

SH: Our research shows about 82 per cent of advisers are not aware of what Basel II is and have not cottoned on to the fact it means low risk customers are likely to get a better price in the future. I think advisers have been used to seeing a product on a sourcing system and basically just submitting an application to a lender. Because of the competition among lenders that has been the way for some time. Individual pricing is on the horizon and that is how a customer will see it. Just as at the moment you can apply for a car loan and it will grade you as good, medium or excellent and detail the rate that will apply I think we can see that occurring in the not too distant future for mortgage customers.

MA: What has been the take up of Astra's Pos-D products compared with N&P's standard mortgages?

SH: We launched the Astra brand in March last year as a pilot and then took buy-to-let to the whole of the market in June. It was March this year we were confident the brand was there and our Pos-D system was going to work that we launched. The market made it easy for us to launch. Pos-D is the delivery of the capital structure. Initially, for the first few weeks of March, 30 per cent came through for Pos-D. Primarily that was because we were trying to get the message out there about what Pos-D really meant and we are still trying to get that message out there but they are picking it up very quickly. In April we have just short of 60 per cent coming through on Pos-D, which is pretty good. The intermediary community is picking it up quite well.

MA: Are you concerned about being inundated with applications at the moment?

SH: Service has been quite a key element of our proposition and that is why we have enjoyed our position on panels. The credit crunch has seen some lenders pulling out of the market and we are still there. The volumes are higher, roughly 100 per cent more than they normally would be, but we anticipated that this might happen and started work on our online systems. Our online systems have made us more efficient and able to do more with the same number of staff. At the moment we are only two days behind in getting to look at mortgage applications and I understand that is very good according to advisers I am speaking to. There has been pressure on staff but we are coping well. We have a green stream of staff that deal with lower risk mortgages that can go to offer very rapidly. The Pos-D systems has allowed us to identify the good and easy mortgages. The underwriting side pays attention to the cases that need more attention. The Pos-D system is key. The Pos-D system can take as little as seven minutes to get a decision and then on our system they can print off a mortgage certificate that goes through everything like their risk scoring and affordability and that helps get the quality through to us and helps our processing speeds.

MA: How do you obtain feedback from advisers?

SH: We have regular meetings with distributors and have email contact. The advisers on the ground can give feedback up through the distributors or to us directly. Feedback is not always good and people question why we are doing this but our team explain the reasoning. Our proposition is very much around service and that they can get a better rate for low risk customers.

MA: What is a typical day like for you?

SH: In general I am responsible for the products that are out there in the market and I am responsible for volumes, return on capital and ensuring the capital we employ is used efficiently and we do not overshoot any of the capital. I am responsible for the regions and the broker call centre. I sit in the call centre and listen to some of the calls that come in and get feedback from that and that can be an eye opener. It is constant monitoring and co-ordinating. The beauty of working for this sort of organisation is our staff have been with us for a while. I am still very much the new boy as I have only been there for eight years now but a lot of staff have been there a lot longer in key roles and that helps me considerably in achieving objectives.

MA: What is the most important thing you have learnt from your time in the mortgage industry?

SH: I started in branches and worked my way up to branch manager then area manager. For us, launching this new brand we have needed people around us. I know lenders are having a bit of a hard time at the moment and fairly often we are where we are because of circumstances like short notice for pulling products. We do not want to do that as lenders - I do not mean just Astra but lenders generally. We wish life was not like that but it is and there is only so much you can deliver. What I have learnt is you need people around you and you cannot do it on your own.

MA: What is your prediction for the mortgage industry in the months ahead?

SH: Because we have been around for more than a century we are able to raise the wholesale funding we need because we have a tried and tested business plan that has been proven to be pretty robust over the years. We know what we can do and how to do it. It is working. Building societies are considered the old-fashioned side of the industry. What people often miss is we have a business model that works. Building societies should be taken much more seriously than they have been by the FSA and by others. At the moment, with the credit crunch, the FSA and the government should speak much more to building societies.

MA: Should advisers be concerned about what is going on in the market at the moment?

SH: It is a correction for the industry. Advisers and lenders will have to up their game. They are going to have to look at different ways of researching mortgage products. It is not going to be quite as simple as it was. There is still an excellent career for people in the industry if they are willing to develop close relationships with their clients. In the past a sale has been made, forgotten and people have moved on to the next one. Now, with lower volumes in the market, the adviser has to work with that and have a close relationship with their client, build on that and make that relationship work.

MA: Only a few months into Astra becoming the intermediary lender for Norwich & Peterborough are you looking at making any changes?

SH: We have ideas for our website, to improve it even further. We are making it more slick. We are working on interest loading factors and widening the ability of it to make the Pos-D product with much more breakdowns. We may have to capture one or two bits of more information but really it is about making it more efficient. Watch this space.