Starling Bank buys Fleet Mortgages

Starling Bank has acquired Fleet Mortgages in a £50m cash and share deal, making it the sole funder of future originations for the BTL lender.

Starling was advised by Rothschild and PwC as financial adviser and TLT as legal counsel, while West Hill Corporate Finance and Humphries Kirk represented Fleet Mortgages as financial and legal advisers, respectively.

This is the bank’s first acquisition and will enable Fleet to build its lending operation by securing access to Starling’s deposit base.

Day-to-day operations at Fleet will continue unchanged.

Fleet has originated £2.3bn of mortgages and experienced zero credit losses to date. 

It currently has approximately £1.75bn of mortgages under management.

The acquisition is part of Starling’s wider plan to expand lending through a mix of strategic forward-flow arrangements, organic lending, and targeted M&A activity.

Anne Boden, CEO at Starling (pictured above), said: “The acquisition of Fleet Mortgages is the start of our move into mortgages as an asset class and builds on a number of forward-flow arrangements that we’re doing with leading non-bank lenders. 

“Fleet’s existing management team will remain in place and Fleet will continue to operate as a stand-alone company, keeping the original name and brand. 

“We’re buying Fleet because it is very good at what it does, not because we want to change it.”

Bob Young, CEO at Fleet Mortgages, added: “This acquisition opens up a range of opportunities that otherwise wouldn’t be available to us.

“It is a natural progression for our lending business, with both Starling and Fleet sharing a very similar cultural fit, and provides us with a very strong lending base from which to work from and to deliver for our staff, adviser partners, and landlord customers.

“It’s certainly exciting times ahead for everyone associated with Fleet and, with new, ambitious shareholders on board, it allows us to potentially move into new product sectors and further grow our market share.”

Fleet Mortgages launched seven years ago and has completed nine securitisations. 

Bob believes 2021 will be its best year yet, with new mortgage loans running at £800m and half-year pre-tax profits of £4m.

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