Mr Hartop has more than 25 years in the banking industry under his belt, and was previously head of finance at private bank Adam & Company before joining Scottish Widows Bank in 1993, where he became MD ten years later.
In 2013 he joined Edinburgh-headquartered Hampden & Co, having been approached by banking industry veteran Ray Entwistle to discuss setting up a new lender to accommodate the commercial banking needs of high-net-worth individuals with a highly relationship-driven approach. Mr Hartop has previously said that he felt there was a “really significant opportunity in the market”.
Hampden & Co in October revealed its third-quarter results, with total lending up 16 per cent against the previous three-month period at £289 million and jumping 77 per cent on a year-on-year basis. Deposits also increased over the quarter, up £5.2m, with a year-on-year jump of 18 per cent to £429m.
You said in August that the “extraordinary” circumstances of the previous few months had been challenging, but you were pleased with how Hampden had managed. Can you give more details of how your role and that of Hampden have been affected by the pandemic? What has been the most difficult aspect?
2020 was a challenging year for nearly all businesses and that was no exception for Hampden & Co. Working from home was difficult at first but our staff have adapted admirably and continue to give our clients first-class service.
A number of the bigger banks have struggled to maintain service levels given the call volumes to their contact centres and this has been very positive for us as our clients truly appreciate this relationship-driven approach, particularly through these difficult times, and as a consequence the level of referrals from existing clients and the professionals we deal with has been strong.
A challenging aspect has been the impact of the reduction in interest rates to close to zero or negative across the globe, which affects the income streams of all banks and we are no exception to that. We have, however, mitigated this impact to a large extent through increased business volumes and a close control on costs.
You announced further growth in lending and deposits in Q3 – how are the full-year results shaping up and what are your hiring plans?
2020 was a very positive year for the bank with strong levels of growth on both sides of the balance sheet. Our lending growth was particularly strong at more than 60 per cent year on year and the quality of this business is very good as there are not many lenders that serve high-net-worth borrowers well.
Our bespoke approach is well-suited to this market and I see demand continuing to grow for tailored lending solutions. To deliver this professional approach, we recruited a number of experienced bankers over 2020 and this will continue this year. We also look to recruit young talent with the capability to develop as our business grows.
The landscape of Scottish banking has been shifting, for example with Clydesdale rebranding as Virgin Money and Royal Bank of Scotland (RBS) changing to NatWest. How do you feel about being one of the few remaining Scottish-headquartered banks – but also a newer player in the market?
There have been many changes to the Scottish banking community over the last 15 years or so, but Scotland remains a very strong centre of excellence for the industry as there is so much experience and talent here. While many senior roles in RBS and Bank of Scotland moved south following the financial crash, it was very encouraging to see the likes of Sainsbury’s Bank, Tesco Bank and Virgin Money expanding extensively in Edinburgh and Barclays in Glasgow.
Hampden opened its doors in 2015 and is one of only a small number of Scottish-headquartered banks. We opted for our HQ to be in Edinburgh as it is a great city in which to start a bank because of the talent and professional support here. We of course have significant volumes of business from both sides of the Border and we expect our future growth to continue on this basis.
You’ve talked about the days when banking involved the "stern bank manager with a firm handshake" – while your banking director last year addressed “the folly of placing too much faith in an algorithm”. How have these aspects of banking shaped Hampden’s offering?
A significant proportion of the clients we deal with tend to have complex financial affairs. These types of clients do not fit in easily to the algorithmic approach and tend to enjoy a more relationship-driven, bespoke approach delivered by expert bankers. This has served us well in our early years and will continue to be a key feature of our approach.
We also have good, modern technology and we launched our digital platform in 2019, which we will continue to develop. But it is up to our clients how they choose to contact us – whether that be digital, post or by talking to their private banker.
In 2019 the bank acquired a multi-million-pound loan book from Smith & Williamson. Do you see other deal opportunities arising in the current economic climate?
We do from time to time see opportunities for acquisition arising and this I expect to continue despite the current economic climate. In some ways the changed economic environment has created more opportunities and we continue to review proposals that would fit in well to our business model.
The Smith & Williamson acquisition is a good example of working closely with our professional partners and this has brought other opportunities over and above portfolio lending. Our strategy of focusing purely on providing banking services expertly, and not a combination of banking, wealth-management and financial planning, has served us well and this is reflected in the number of professional firms seeking to undertake business with us.
Simon Miller has rejoined Hampden, which he helped bring to life, as chairman. How is he helping drive the bank’s growth?
Simon is a hugely experienced non-executive director (NED) and chairman, well-respected throughout the industry and he was instrumental in the set-up of Scoban as we were called at the time. It has been hugely beneficial to get him back on board and his drive and determination to move things forward at pace will help ensure that our strong growth trajectory continues.
In addition to Simon, two other highly experienced NEDs joined the board last year in Finlay Williamson and David Huntley and we are about to announce the appointment of another very experienced female NED.
What has been the most pivotal moment of your career?
I trained as a chartered accountant but soon after qualifying I moved into banking at Adam & Company in 1988. This was the first pivotal moment for me as I joined an area of financial services that I had a strong affinity for and I have enjoyed the variety and challenges, of which there have been many, in my banking career ever since.
The impact of the global financial crisis in 2008, when I was heading up Scottish Widows Bank, was another key moment as the impact on the industry was massive. The bank performed well over that period and remained profitable but being part of the biggest retail banking group in the UK in Lloyds Banking Group meant that a number of changes needed to be made.
Our business focus at the time quickly moved from mortgage lending to generating deposits and we were able to adapt swiftly given the modern and responsive platform we had in place.
In 2025 it will be a decade since Hampden & Co opened for business – what would you like it to look like then?
The time has flown by since I joined Hampden at the beginning of 2013 and I suspect the next four years will pass by as quickly. By 2025 the bank will be, if it is not already recognised as, one of the leaders in the private banking market, and be seen as a great place for young people to come and work.
This will involve developing our environmental credentials in both our own carbon footprint and our commercial propositions for clients. We will also continue to develop the contribution the bank makes to benefit the wider society we live in. We will also look to develop good returns for our shareholders who have been so supportive in our journey to date.