The listed South African banking and financial services group has owned Kensington for seven years and the deal comes seven months after it first revealed it had been approached over a potential sale.
Investec is set to receive £180m for it’s mortgage businesses in cash, a valuation it said is based on a “tangible net asset value of the business of £165m at 31 March 2014”.
Kensington was acquired by Investec in August 2007. For the year ended March 2014, it reported a profit before taxation of £33m and had gross assets of £3.7bn. Kensington currently has about 140 employees and about 30,000 customers.
Investec’s funding line to the mortgage businesses, which was £1.4bn as at 31 March 2014, is to be repaid entirely at completion. The sale does not include Investec’s Irish mortgage entities, assets or operations.
Keith Street will continue to lead the Kensington mortgage business.
It was back in February that Investec first revealed it had been approached by potential purchasers of Kensington.
The month before, Kensington agreed with the Financial Conduct Authority that it would not enforce “unfair” terms in its agreements for clients that took out loans through Money Partners Ltd.
The FCA published a ‘notice of undertaking’ which details an agreement not to enforce “a number of terms” in the Money Partners mortgage conditions booklet 2004 over concerns that the terms were likely to be unfair under its consumer contracts regulations.
In particular, the FCA felt that the “terms provided the firm with too much discretion”.