Case Study — Retail Banking / M&A Integration
A challenger bank had acquired a specialist lender's loan book but not its underwriting team, leaving an unresolved gap between the acquired portfolio's risk profile and the acquirer's more conservative standards.
The Transformation Framework™
The acquired loan book carried a risk profile meaningfully looser than the acquiring bank's underwriting standards, with no underwriting team transferred as part of the deal.
Nobody had formally decided whether the acquired book would keep its original underwriting standard or migrate to the acquirer's — in the absence of a decision, it was being managed under an unstated default that risk teams weren't applying consistently.
We recommended an explicit, phased migration to the acquirer's standard for new originations against the acquired book, while grandfathering existing loans under their original terms.
The phased migration was documented and communicated to the team managing the acquired book, with clear criteria for which loans fell under legacy versus new standards.
Risk-weighted asset calculations, previously inconsistent month to month, stabilised within one reporting cycle. The bank's exposure to the acquired book is now within 2% of its target allocation, against a pre-engagement variance of 14%.
Measured Outcomes
Reflection
"An unresolved underwriting standard doesn't stay neutral. It just means the loosest interpretation wins by default."
David Lindqvist — Head of M&A IntegrationEngagement team
Head of M&A Integration
Principal, Retail Banking
Senior Consultant