Part of the Five Arrows Leasing Group,
the UK leasing conglomerate run by the ebullient Sam Geneen that
has continued to be supported by its parent, Rothschild, throughout
the dark days of the current recession, State is seen by many as a
stable company with a healthy future.
Recently, however, there have been
signs that all is not completely well at State.
Back in March this year, Simon Mills,
who had been State’s managing director for 21 years, stepped down –
and last month Five Arrows confirmed that it “has no immediate
plans to appoint a [new] managing director”. State’s legal
director, Jeremy Guilfoyle, its asset director, James Sampson, and
also John Luff, a board member of Five Arrows, have run State since
Then, on 17 July, Andrew Bullard,
State’s long-standing and popular sales director, left the company.
He has since been replaced by Barry Hutchings, who joined State
late last month.
For 12 years Bullard, who had close
contact with the broker community, was the ‘face’ of State
Securities. During the pre-recession days Bullard was well-known
for rewarding brokers who brought in the most business with
incentives such as a free holiday.
These senior personnel moves take
place against the background of a series of major changes within
the company – many of which were in direct response to the economic
During the second quarter of last year
State closed its branch networks in Scotland, Leeds, Preston and
Birmingham, and instead operated exclusively out of Southampton.
State now has 56 staff members – down from the 78 it had at its
height in June 2007.
Several months earlier State had
withdrawn from the commercial mortgage market, and had decided to
“pursue a policy of stabilising its portfolio as opposed to
pursuing growth”, Guilfoyle said last month.
Both of these measures partly explain
why monthly new business volumes have “been reduced since the last
quarter of 2007, remaining at lower but consistent levels to date”
according to Guilfoyle.
In spite of these changes, State does
not appear at this stage to be considering any major re-think to
its basic strategy.
“State remains committed to the broker
introduced market and to meeting the needs of customers not served
by mainstream lenders,” Guilfoyle said.
Also, while lending levels are down,
it is still well supported by Rothschild – and ultimately State
looks capable of surviving the recession. Indeed, return on equity
for State’s financial results for March 2009 was “satisfactory”,
and year-end profits are expected to be on equivalent figures for