Barclays buys Kensington Mortgage Co for £2.3bn
Barclays has paid £2.3bn for non-standard mortgage specialist Kensington.
Kensington Mortgage Company, formerly Kensington Group, lends about £1.6bn a year, mostly extended to the self-employed, people with multiple incomes or people borrowing higher than normal multiples of their pay.
The sellers are the private equity groups Blackstone and Sixth Street Partners, which have owned the business since 2015.
Barclays has paid £2.3bn for non-standard mortgage specialist Kensington.
Kensington Mortgage Company, formerly Kensington Group, lends about £1.6bn a year, mostly extended to the self-employed, people with multiple incomes or people borrowing higher than normal multiples of their pay.
The sellers are the private equity groups Blackstone and Sixth Street Partners, which have owned the business since 2015.
The deal is seen as a significant bet by Barclays on Britain’s housing market. Matt Hammerstein, chief executive of Barclays Bank UK, 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 based in Maidenhead and has about 600 staff. It historically has funded itself by packaging up mortgages and selling them on but Barclays will in future keep the loans on its own balance sheet.
In the run-up to the banking crisis the old Kensington, like many subprime lenders, did not require borrowers to provide proof of income but relied instead on on self-certification. The mortgages became known as “liars’ loans” as many borrowers exaggerated their incomes and got into difficulties.
The company generated £65.9m of income and a pretax profit of £500,000 in the year to March 2021. A separate KMC mortgage portfolio, which Barclays is also buying, made a profit before tax of £1.1m in the six months to March 2022 before mark-to-market hedging gains of £9.2m, Barclays said.
The Times (£)
