9th Sep 2014 07:30
LONDON (Alliance News) - Investec PLC Tuesday said it has sold specialist UK mortgage business Kensington Group PLC, along with other of mortgage assets, to funds managed by Blackstone Tactical Opportunities Advisors LLC and TPG Special Situations Partners, in a restructuring deal that builds the specialist bank and asset manager's capital and leverage position.
In a statement, Investec said it sold the assets for GBP180.0 million in cash, based on a tangible net asset value of GBP165.0 million. The deal does not include Investec's Irish mortgage entities, assets or operations. Investec said the proceeds will be deployed in its UK specialist banking operations.
The deal is part of Investec's strategy of simplifying and reshaping its specialist banking business, while reducing the assets within its legacy non-core business. Investec estimated that the deal will increase its common equity tier 1 ratio by about 1%.
Together with the recent sale of Investec Bank (Australia) Ltd, the deal is expected to increase Investec's common equity Tier 1 ratio to 11.3% from the 8.8% recorded at the end of March. In addition, it expects its leverage ratio to increase to about 9.2% from 7.4%.
Kensington was originally acquired by Investec in August 2007, with a view to enhancing its securitisation activities. However, the onset of the financial crisis resulted in difficult credit market conditions and impacted the then newly acquired business.
Investec shares were early Tuesday quoted up 0.5% at 559.50 pence.
By Samuel Agini; [email protected]; @samuelagini
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