Barclays launches £2.3bn swoop on Kensington

BARCLAYS is set to snap up specialist lender Kensington Mortgages from private equity firms Blackstone and Sixth Street, for £2.3bn.

The deal comes as Barclays tries to boost its presence in the UK mortgage market, with rising interest rates making it more profitable for banks to lend.

Kensington, which was founded in 1995 and is based in Maidenhead, Berkshire, lends to the selfemployed and those with several or variable incomes, who are often not served by mainstream banks.

Its mortgage book is at £1.2bn, and consists of 70pc owner-occupied loans and 30pc buy-to-let.

The purchase price will depend on it hitting £2bn by the time the deal completes, around the end of this year or early in 2023.

Kensington, which has around 600 employees, also attracted the interest of challenger bank Starling. But Barclays won the race.

Matt Hammerstein, the boss of Barclays 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.’

Kensington was listed on the London Stock Exchange between 2000 and 2007, before being bought by Investec for £283m.

Blackstone and Sixth Street bought it in 2015 for £180m. Since then, Kensington has more than tripled the number of underwriting staff and almost quadrupled the number of loans it makes.

It says only 19 loans issued since 2010 have gone into default, due to its strong credit checks, with total losses of just £252,000.

Kensington chief Mark Arnold said the deal would ‘help us to drive our next expansion phase’.