<\/p>\n
FirstRand has hired Bank of America (BofA) Corp and its own investment-banking arm, Rand Merchant Bank (RMB), as advisers to help it sell its UK-based Aldermore Group and exit the European market, a spokesperson for the South African lender said this week.<\/p>\n
The bank, among the continent\u2019s biggest, is using a dual-adviser structure in an effort to widen the pool of potential buyers for the UK-based specialist-banking subsidiary that it bought in 2017.<\/p>\n
Read:
Brexit for FirstRand
UK motor finance payouts set at R170bn<\/p>\n
FirstRand said in April that it would work on \u201can orderly ownership transition\u201d from Aldermore after it was forced to more than triple how much it set aside to cover compensation for customers over claims they were missold car loans in the UK.<\/p>\n
Representatives from BofA declined to comment while RMB didn\u2019t respond to queries from Bloomberg.FirstRand increased a provision to cover such costs by \u00a3510 million ($694 million) to \u00a3750 million after the UK Financial Conduct Authority finalised its redress plan in March. Collectively, the industry has to pay about \u00a39.1 billion to consumers, with 12.1 million loans eligible.<\/p>\n
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Lenders in the UK motor-finance industry, including Lloyds Banking Group Plc and Close Brothers Group Plc, had argued the regulator\u2019s proposals were too strict and failed to take proper account of a Supreme Court ruling.<\/p>\n
FirstRand has reiterated its view that the FCA plan is \u201cunfair and disproportionate,\u201d but has decided it would not legally challenge the redress plan.<\/p>\n
Aldermore Group comprises Motonovo Finance \u2014 a major provider of motor finance in the UK \u2014 as well as Aldermore Bank, which focuses on small- and medium-sized enterprise lending as well as residential mortgages, and has been part of FirstRand\u2019s UK growth strategy since its acquisition.<\/p>\n
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Read:
FirstRand\u2019s UK future hinges on motor finance decision, CEO says
FirstRand questions fairness of UK motor finance redress scheme<\/p>\n
Rising funding costs, regulatory pressures and increased competition in specialist lending markets have prompted several European and African banking groups to reassess their overseas holdings.<\/p>\n
The lender\u2019s overall business in the UK comprises about 10% of its company-wide earnings and represents about 20% of its balance sheet, FirstRand has said previously.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#FirstRand #Brexit #Group #hires #BofA #RMB #advise #sale #Aldermore #unit<\/p>\n","protected":false},"excerpt":{"rendered":"
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