Mid-sized lending agencies in the British Isles may face some near-term difficulties, but should make it through those problems intact, according to Fitch Ratings. However, both Fitch Ratings and Standard & Poor's set a cautious tone about the state of the construction sector in the U.K. and Ireland.
For instance, lenders Alliance & Leicester and Bradford & Bingley have seen share prices fluctuate widely during the recent liquidity crises. They managed to remain in a solid position because of their funding models and timing, said Fitch. Both banks correctly anticipated growth in loan origination business for 2007 and funded themselves accordingly through securitization and covered bond issuance. This meant that neither institution needed continued access to capital markets when the paper dried up.