The boards of OneSavings Bank PLC (OSB) and Charter Court Financial Services Group PLC have reached an agreement on the terms of a recommended all-share combination.
Charter Court shareholders will own approximately 45% of the combined group, with an exchange ratio of 0.8253 new OSB shares for each Charter Court share.
David Weymouth, chairman of OSB, said: "I am very pleased that we are today announcing the combination of OSB and Charter Court, two businesses that have demonstrated remarkable growth and returns in the specialist lending market segment over the last decade.
“The OSB board and management team have built a strong, customer-focused approach that we believe can develop from strength to strength through the combination with Charter Court and continue to grow the businesses within the fragmented specialist lending segment."
The boards of Charter Court and OSB believe that the combination has a strong strategic rationale, which would create a leading specialist lender in the UK with greater scale and resources and presents an opportunity to maintain two leading, independent distribution platforms to create an “enhanced” proposition to the broker community.
Malcolm Williamson, chairman at Charter Court, said: “The strategic fit of the two banks is compelling and will bring together complementary strengths and capabilities to enhance our customer proposition and create a leading specialist lender that is very well positioned to deliver sustainable returns and take advantage of future growth opportunities.
“Since Charter Court's foundation in 2008, the Charter Court management team has achieved a tremendous amount in building Charter Court into one of the UK's leading specialist banks.
“To now be bringing together the complementary strengths of Charter Court and OSB is a great opportunity and excellent base from which to continue a growth strategy.”
The merger comes as the specialist banks released their preliminary results.
Charter Court saw profit before tax increase by 41.6% to £158.2m (2017: £111.7m) and loan book growth of 24.2% to £6.7bn (2017: £5.4bn) for the year ended 31st December 2018
Ian Lonergan, CEO at Charter Court, said: "In our first full year as a listed company, we again continued to meet or exceed all our guidance and targets as we demonstrated the capability of our specialist lending platform to drive significant growth from the increasing sophistication and professionalisation of demand in our chosen buy-to-let and specialist residential mortgage markets.”
OneSavings Bank’s preliminary results for the year ended 31st December 2018 revealed that underlying profit before tax increased by 15% to £193.6m (2017: £167.7m), and loan book growth of 23% to £9bn (2017: £7.3bn).
Andy Golding, CEO at OneSavings Bank, said: “While the economic effect of Brexit may impact some business opportunities, OneSavings Bank is positioned well, with a strong balance sheet, an excellent track record in raising and retaining retail funds and a high-quality secured asset portfolio.
"I am delighted that OneSavings Bank delivered excellent shareholder returns in 2018.
“Our core buy-to-let segment continued to grow, attracting our target professional landlords, and our commercial business is flourishing, reflected in strong new business volumes in the year”
Andy has been confirmed as the CEO of the new combined group.
The specialist banks revealed earlier this week that they were in advanced talks regarding a possible merger.
SIGN UP TO OUR NEWSLETTER TO RECEIVE MORE NEWS LIKE THIS STORY
Redefining banking: AI
This is an exciting time for financial services as a new era of interrelated technologies, including artificial intelligence (AI), robotics, blockchain, machine learning, cloud computing and data science, are causing widespread technological and digital disruption in the industry...
Apple introduces Apple Card
Apple has announced the creation of its first credit card 'Apple Card', which will be made available in the US this summer...
FCA proposes changes to help mortgage prisoners
The FCA has proposed changes to how lenders assess the affordability of a loan...
Hanley Economic BS strengthens shared ownership range
Hanley Economic Building Society has bolstered its shared ownership product range through the addition of a no-fee, shared ownership variable discount mortgage for term with a headline rate of 2.89%...
Al Rayan Bank confirms appointment of new CCO
Al Rayan Bank has appointed Maisam Fazal (pictured above) as chief commercial officer (CCO)...
AI Rayan provides £228 million of property finance to expats
Al Rayan Bank has announced that it has financed £228m in residential property finance to UK nationals living and working overseas...
Vanquis Bank names new MD
Provident Financial PLC has announced the appointment of Neil Chandler (pictured above) as managing director at Vanquis Bank...
Wyelands Bank hires two new regional directors
Wyelands Bank has made two additions to its working capital solutions team...
Triodos Bank reports 17% growth in sustainable lending
Triodos Bank has reported a 17% year-on-year growth in sustainable lending for the year ended 31st December 2018...
Tandem introduces new savings account powered by AUTOSAVINGS
Tandem has launched a new savings account which pays 0.5% interest...
Project BankNorth picks nCino to provide digital banking platform
Project BankNorth has partnered with cloud-banking fintech nCino...