The Wealth Management Credit Division of Eurobank Limited provides a broad range of tailored financing solutions designed to meet the diverse needs of its clients, combining swift execution, competitive pricing and a client-centric approach.
These offerings include UK property financing for investment purposes, housing loans, financing for the acquisition of investment properties in Cyprus or Greece, car leasing facilities and a wide range of other banking products and credit solutions.
Among these solutions, Lombard loans represent a specialised form of financing available to Private Banking clients, providing fast and cost-effective access to liquidity.
What is Lombard Financing?
Lombard financing enables clients to obtain credit by pledging their existing diversified portfolios as collateral. Rather than liquidating their financial investments to meet their long- or short-term requirements, clients may choose to leverage their investment portfolios to access liquidity while preserving their investment strategy.
Eligible securities consist typically of liquid financial instruments such as bonds, listed equities, mutual funds and structured products held under the custody of the Bank. The collateral value of these investments is assessed by the Bank based on criteria such as credit rating, market capitalisation of the issuer, liquidity and volatility.
Financing is structured in the form of a short-term revolving facility available in major currencies with a tenor of up to three years. Given the type and quality of collateral in place, the client may secure favourable pricing terms, which may be renewed at maturity based on prevailing market conditions.
Strategic Advantages of Lombard Financing
One of the key advantages of Lombard financing is its ability to provide clients with quick access to liquidity without requiring the sale of their investment assets. Once the investment portfolio to be pledged is determined, the approval and drawdown process is fast, as it is more streamlined than that of traditional mortgage financing. Funds are made available at a competitive pricing. Moreover, the process is more cost-efficient since the client does not incur the expenses of traditional mortgage financing such as valuation or mortgage fees. Importantly, clients retain ownership of their underlying investments and may continue to manage and trade their portfolios in line with their investment strategy, subject to agreed covenants. This enables them to meet their liquidity needs while remaining fully invested and positioned to benefit from potential market opportunities and long-term portfolio growth.
Having to liquidate investments to fund investment opportunities may result in various costs, such as transaction fees and loss of future investment returns. Moreover, market conditions are not always ideal for disposals especially during periods of heightened volatility or uncertainty. In such circumstances, Lombard financing provides a fast, flexible and cost-effective source of liquidity.
Lombard financing may be used to fund investment opportunities such as:
• Financing real estate acquisitions
• Supporting business expansion and entrepreneurial ventures
• Managing short-term cash flow requirements
• Providing readily available liquidity to capitalise on new investment opportunities
The Evolving Role of Specialised Financing in Wealth Management
Wealth management today extends far beyond investment performance. Rather, it encompasses a holistic approach to preserving, growing and transferring wealth across generations. As a result, clients look to their banking relationship managers for integrated solutions that combine investment management with financing solutions.
At Eurobank Limited, we recognise that financing can be an important component of an overall wealth management strategy. In an environment characterised by higher interest rates and a greater focus on capital efficiency, the ability to access liquidity against existing assets has become increasingly valuable. Lombard financing provides clients with a bespoke opportunity to unlock liquidity from their investment portfolios at more favourable terms than many traditional borrowing alternatives whilst preserving the potential for future portfolio appreciation and wealth generation.
*By Emilia Zachariou, Head, Wealth Management Credit, Eurobank Limited & Amanda Iacovidou, Senior Relationship Manager, Wealth Management Credit, Eurobank Limited
