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CV: Wayne Preston joined Investec Private Bank in 1998 as head of IT and strategic projects. He was subsequently promoted to head of the transactional banking division and IT in 2000 and then also became global head of IT for Investec Private Bank in 2001. In 2003 he was tasked with the integration and turnaround of the Investec insurance brokering division. In 2005, he was appointed to set up the banking specialisation business within Investec Private Bank. Since 2006 Mr Preston has been responsible for the creation and development of a private client lending and banking business in the UK. This includes responsibility for Investec Private Bank's mortgages. Prior to joining Investec, from 1991 to 1998 he was a systems integration consultant at Andersen Consulting.

MA: What were you tasked with doing in your current role?

WP: The idea was to come from South Africa and work alongside the team here in the UK to establish a private banking business. Our clients are high-net worth individuals and we look at other investments for them. So I was tasked with building a lending business that would attract the right sort of clients for Investec Private Bank.

MA: What would you say were mortgage adviser's perceptions of Investec Private Bank?

WP: When we went into the market and spoke to mortgage advisers there were a couple of things that were initially quite a big challenge for them and ourselves. First, we are not an asset-based lending company. Most of our competitors lend against the property so they look at loan-to-values but we look at it from the client's point of view. We are very client-centric and our objective is to take a full look and understand the client and then consider the transaction behind it. We do not have products and do not have a rate sheet. Every client is considered individually and in the case of the mortgage it is structured around their needs, cashflow and the type of asset they are buying.

MA: What sort of client should mortgage advisers consider Investec Private Bank to be suitable for?

WP: We focus on £1m plus mortgages so the first guide would be the size. When you get into the £1m plus mortgage space often you are looking at a lot of complexity. The second guide would be if the client had complex requirements in the sense they had a global balance sheet of many assets across many different countries. For example, if they were non-domiciles or if they were earning in dollars but looking to buy a UK property.

MA: Investec Private Bank's mortgages are custom-built for each client with advanced features, such as multi-currency capabilities or gearing against multiple assets. How does the design process differ from typical lenders?

WP: We start with trying to get a good understanding of the client's income and balance sheet. The main issue is serviceability. We start with the client's income. If we require income to come from other sources of assets, such as dividends or offshore assets they can use as security we bring that all into account when structuring the loan. We then look at the asset and say they were looking at a property in London we see how the client wishes to service that loan, whether it is interest-only or payments are monthly or yearly depending on the way they receive their income.

MA: Who processes home loans for Investec Private Bank?

WP: We have a small team of 21 people and we can all underwrite. We then have a credit committee that sits in the same building that we can go to at any time. Basically, we would put the deal together and take it to the credit team and have a discussion with them around what we are trying to do, the structure and so on.

MA: How does the adviser present a client to you and what is your typical turnaround time?

WP: A lot of advisers contact us by email. We are able to say whether we can do the deal or not and make an decision in principle. We did an £8m lend in two days. Often turnaround time is dependent on the client and the property. The average time is probably from two weeks to two or three months depending on if it is onshore or offshore. A lot of our clients are UK based but looking to buy offshore.

MA: Investec owns Kensington. How do you work with Kensington? Is there any overlap in the types of products you would offer?

WP: We have got really different target markets. We meet regularly to understand the two propositions and where there are opportunities to work together. We share contacts and referrals. The nature of our business is all on balance sheet lending.

MA: How has the credit crunch impacted on Investec Private Bank's mortgage lending? In June, you said you were seeing more large loan applications as a result of your competitors reviewing their lending criteria.

WP: The credit crisis and crunch has put a lot of strain on the market. We have seen purchases slow down significantly. Given a lot of high street lenders have pulled out of the large loan market, a lot of doors have opened for us. We are nervously optimistic as historically deals we would never have got, that would have gone to the high street because of pricing, have gone to us. That is exciting because for the right client at the right price we are able to do deals we have always wanted to do but we would not have hit these people's radar a year ago.

MA: In February, Investec Private Bank launched a mortgage designed specifically for individuals who earn a large proportion of their income from annual lump sum bonuses. How has this deal been received?

WP: We had quite a lot of inquiries but a lot of the clients we had approved were gazumped, even in this market. All the inquiries we received from high bonus earners still had a good net asset value, a significant balance sheet and were not really a worry for us. We still do those mortgages.

MA: Last summer, Investec Private Bank announced it would be targeting the "jumbo" mortgage market with personalised home loans offering multi currency and flexible repayment options. You were reported as saying "jumbo" earners were stuck in a mortgage no man's land. Is this still the case?

WP: The "jumbo" mortgage market has changed. A year ago most people defined a jumbo mortgage as £2m but today it is £1m due to liquidity and funding. Our sweet spot is between the £3m and £8m space - that is where we see most of our volume and do most of our transactions. We are very much open for business in that space. When it comes to the super prime space - where you are talking £10m plus - very few people can afford that. It is a very small community looking for property and they are very driven by address, the area, and so forth. We have historically done £10m plus mortgages but we would have to be very comfortable around the property.

MA: Are you looking at changing the types of deal or clients you have?

WP: No, but historically we did a lot more of the complex deals that were in currency. Those transactions are still there but we are finding more clients buying their primary residence and moving into the buy-to-let space because they are interested in residential investments as there are some good bargains out there and it is a buyer's market. We have seen a significant shift in the amount of activity we do and that has largely been driven by the less complex deals coming through and we have 40 per cent year-on-year growth. Even though the market is down we have picked up.

MA: Do you expect this balance of business to continue?

WP: What this market has done is given us the opportunity to balance our book and do a lot more sterling work as historically we did a lot more currency. We are competing head-to-head today with the banks. We have seen a lot of investment boutiques unable to find the funding and pull out of the market and that has increased our volume. But we have also increased awareness of our brand. People we met long ago are now calling us.

MA: Does Investec remain committed to the mortgage industry?

WP: Our bank's strategy is to be self funded and we will continue to have all our lending coming off client's deposits. In this market that does open doors for us. Investec is 100 per cent behind us because we do a different type of lending and it allows us to get in front of the right type of clients that can assist the other parts of the private bank and the group as a whole.

MA: What is the most important thing you have learnt working in the financial services industry?

WP: You have to be tenacious, you have to keep going. Stick to your core beliefs and values. We have always been a responsible lender and we have not waivered from that and at a difficult time our clients are in a situation where we know they can afford their mortgage and that is important. We never wanted to be lender of last resort and turned away a huge amount of business last year. It wasn't lending at all costs it was about the right client and the right asset.

MA: What does the future hold for the UK mortgage industry?

WP: It is going to be a tough time. I am nervously optimistic about the way forward as a business but for the market it will get harder before it gets easier. A lot of bad publicity is out there and you have to stand back and be holistic about this. Things are going to be tough for at least the next 18 months before things ease up.

MA: What changes can advisers expect to Investec Private Bank's mortgage offerings?

WP: One thing you can expect is more innovation. We want to be sure-footed in these difficult times and be here for our clients. In good markets and bad markets there are opportunities and our business is based on entrepreneurs who will be looking for opportunities and we want to be there for them. We are looking at given what is happening in the market at the moment the way people traditionally looked at lending from a cashflow or offering perspective. There could possibly be changes to the way they access the cash and leverage other components of their balance sheet, widening the criteria of the sorts of investments we are willing to look at.