Barclays to acquire UK lender Kensington Mortgage Company
Multinational bank Barclays has agreed to acquire UK specialist mortgage lender Kensington Mortgage Company as part of a deal valued at approximately £2.3bn.
The FTSE 100-listed group said on Friday that the acquisition of Kensington Mortgage Company will be financed from existing resources and enable the bank to broaden its product offering and capabilities in the UK mortgage market.
KMC, as well as a portfolio of UK mortgages originated by the business from October 2021, will be purchased from companies controlled by funds managed by Blackstone Tactical Opportunities Advisors and funds affiliated with Sixth Street Partners.
Barclays estimates that the acquisition will reduce Barclays' CET1 ratio by approximately 12 basis points, assuming completion takes place in the latter part of Q4.
Chief executive Matt Hammerstein said: "The transaction reinforces our commitment to the UK residential mortgage market and presents an exciting opportunity to broaden our product range and capabilities. KMC is a best-in-class specialist mortgage lender with an established track record in the UK market, strong broker and customer relationships, and data analytics capabilities.
"KMC complements our existing UK mortgage business and broker relationships through the addition of a specialist prime mortgage originator and the utilisation of our strong UK funding base. The transaction should generate attractive returns for Barclays over the medium term as the KMC mortgage portfolio increases in size through the ongoing origination of new mortgages."
Reporting by Iain Gilbert at Sharecast.com