A private bank in the UK has seen growing numbers of senior executives wanting to take out "jumbo loans" of more than £1 million (€1.5 million) to buy shares or make investments since the start of the global stock market turmoil.

Investec Private Bank, which is part of a South African bank, extends personal £1 million-plus loans to senior executives and company founders which are used to fund share purchases in their own company or make an investment in an unquoted company.

These loans are often secured against the directors' personal wealth as collateral.

The bank, which started the service two years ago and expects to advance about £100 million this year, only lends to very senior directors and company founders with a proven track record.

The executives often have much of their personal wealth tied up in executive remuneration share plans but want to access financing to buy shares or make an investment.

Several private banks already offer a similar loan service to FTSE 100 directors, but until now banks have been more reluctant to advance such loans to executives in mid-market cap and Aim companies, where Investec has done much of its lending to date.

Shares in Aim-listed and mid-cap companies are usually more illiquid and thinly traded, meaning large chunks of shareholdings can be sold less easily.

Investec said that in the first three weeks of August it had seen a 30 per cent month-on-month increase in the number of senior executives who had contacted it seeking to borrow money to purchase shares in their own firms.

Since the beginning of August, 80 per cent of the calls received from executives to Investec's strategic shareholder finance service have been in relation to borrowing money for more shares.

The bank believes that the increase in demand has been fuelled by hedge funds starting to unwind and sell down their stakes because of the subprime mortgage meltdown in the US.

The subsequent share price falls mean many executives view this as a buying opportunity.

David Drewienka, head of specialised lending service at Investec Private Bank, said: "From our experience, it would appear that many executives believe that their companies are undervalued and that the stock market volatility represents a good opportunity to purchase more shares."

Investec, which typically charges a fee and interest rate on advances, believes that it is mitigating any risks of default because it secures the loans against directors' personal wealth.