Co-op outsources mortgage book to Capita in £325m deal

Capita has been selected to manage the Co-op bank’s mortgage processing operations for its Co-operative Bank, Britannia and Platform mortgage brands in a deal worth £325m over 10 years.

If agreed, Capita would acquire Western Mortgage Services (WMS), the bank’s mortgage administration business based in Plymouth, and would assume responsibility for the bank’s other mortgage processing and administration operations, predominantly based in Leek, Staffordshire.

Under the terms, approximately 660 employees in WMS and the bank’s £23bn retail mortgage book would transfer to Capita.

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The proposed deal remains subject to final terms, completion of due diligence, board, regulatory and secured funding trustee approval, but all parties anticipate the service could start in the first quarter of 2015.

Niall Booker, chief executive at the Co-op Bank, said: “Our aim is to become a more efficient bank that is better placed to serve our individual and SME customers, with values and ethics at the heart of everything we do.

“Developing our core retail mortgage business is a key part of this strategy. It is vital we improve our processes, consolidate and utilise up to date mortgage systems and, as a smaller bank, ensure we can respond nimbly in a competitive market, mindful of the impact of increased regulation to our cost base.

He added: “These proposals, to partner with Capita, would support our plans for substantial growth in retail mortgages and would enable us to continue to deliver high standards of service to our customers and brokers.”