'There’s a fair bit of broker frustration about how difficult some lenders have become to deal with': Michael Thompson, LHV Bank

FR: You’ve been with LHV Bank since the early days of its UK journey. How has that experience been, and what’s your role today?

It’s been quite a ride, to be honest. I’ve been involved from the very early stages of building out the UK operation, when it was still very much a case of putting the foundations in place and working out exactly what we wanted to be. 

There was a clear idea that we wanted to do things a bit differently, bring some of the more traditional banking values back, but in a way that actually works in today’s market.

It wasn’t straightforward. You had a lot going on in the background, whether that was the wider economic picture or just the practical side of growing something from scratch. So you had to be adaptable. You couldn’t just stick to one way of doing things and expect it to work.

What’s been good at LHV is the level of trust. You’re given the space to do your job properly. There’s a lot of experience across the team, and that’s recognised. It’s not a rigid environment, you can have proper conversations internally about how deals should be structured and how we approach lending more broadly.

FR: What does your day-to-day actually look like in practice?

There isn’t really a set pattern, which is probably the best way of putting it. So I’ll see a deal come in, assess it, decide whether it’s something we want to take forward, and then stay involved right through to completion.

That can mean everything from structuring terms, to going out and meeting the client, walking the property, and getting a proper feel for what’s going on. I’m quite big on that. You can only get so far reading text on a screen. When you’re actually there, speaking to the borrower and seeing the asset, you understand it on a completely different level.

FR: You’re speaking to brokers day in, day out. What are you hearing from them at the moment?

There’s a fair bit of frustration and a lot of it comes down to how difficult some lenders have become to deal with. Now, some of that is down to regulation, and that’s understandable, but there are still situations where you hear a case and you just think, “that doesn’t need to be that complicated”. Common sense feels like it’s dropped out of the process in places.

Brokers talk about not being able to get hold of decision-makers, slow response times, and a general sense that even when a lender says they want the business, it doesn’t quite feel like it from the experience.

That’s where we try to be different. We get called approachable quite a lot, and that’s important to us. If someone’s got an issue, or even just wants to talk a deal through, they should be able to pick up the phone and speak to the person who can actually move it forward.

Over time, those relationships tend to become quite direct as well. The broker is always involved, but we’ll often be speaking to the client regularly because it keeps things moving and avoids unnecessary delays.

FR: Industrial assets have remained relatively resilient. What are you seeing there, and how are you approaching those deals?

Industrial has been one of the more consistent parts of the market, but you still have to look at it properly. There’s strong demand, whether that’s logistics, warehousing or light industrial, and that gives you a level of comfort. But it doesn’t remove the need to understand the details.

Location matters, tenant strength matters, and importantly, how flexible that asset is if things change. If a tenant leaves, how quickly can you re-let it? What does the local demand look like?

What I would say is brokers are getting better at thinking along those lines. It’s not just “does this work today?”, it’s “how does this hold up over time?”.

When that thinking is done early, you tend to end up with better structured deals and fewer surprises further down the line.

FR: Retail has faced a more mixed outlook. How are you assessing retail-backed deals at the moment?

Lending appetite more generally for the retail sector is definitely more selective, but it’s not something we just avoid altogether.

There are parts of the market that are more challenging, particularly secondary high streets where footfall has dropped off. You go into those deals with your eyes open.

But there are still opportunities. Strong local locations, good tenant covenants, or assets that have some flexibility in terms of how they can be used, those can still make sense.

Quite often, retail sits alongside something else as well. You might have residential above, or a mixed-use element that balances the income. Those types of deals can actually work quite well.

So it’s not about saying retail is good or bad. It’s about understanding the asset, the income, and the borrower behind it, and then making a decision based on that.

FR: What types of cases are coming across your desk at the moment, and where do you see the most opportunity?

We’ve done a lot of residential buy-to-let, and that’s a market we’re very comfortable in. There are some very good operators there, and it gives you a solid base.

Where I think there’s still opportunity is on the commercial investment side. It’s not always fully understood, and in some cases not financed in the right way.

There are risks, particularly in areas like offices where the way people use space has changed. Lease lengths are shorter, tenants are more flexible in how they operate, and landlords have to adapt to that.

But property itself is flexible. It evolves. So if you’ve got the right borrower with a clear plan, there are still good opportunities there.

For us, it always comes back to the quality of the deal and the quality of the operator, rather than targeting a specific sector.

FR: How would you sum up the current lending market, and how are you approaching it at LHV Bank?

There are still headwinds, and you can’t ignore that. We’ve had a number of shocks over the past few years, and that uncertainty is still there to some extent.

From our side, it’s about being positive, but in a measured way. We’re not chasing deals for the sake of it.

It’s about structuring lending in a sensible and responsible way, factoring in that things might not go exactly to plan. Values can move, tenants can change, timelines can shift.

If you’ve built that into the deal from the outset, you give yourself and the borrower a much better chance of managing whatever comes along.

FR: Finally, what can brokers expect from you and the team over the year?

We want to stay accessible, keep those direct lines of communication open, and continue having proper conversations about deals rather than trying to fit everything into a box.

There’s still an appetite to lend, but it has to be done in the right way. If we can keep that balance, supporting brokers, understanding clients, and structuring deals that make sense over time, then that’s where we see our role.

At the end of the day, it’s quite simple. Understand the borrower, understand the asset, and don’t lose sight of common sense. If you can do that consistently, you tend to end up in a good place.