OneSavings Bank and Charter Court agree £1.6bn merger

OneSavings Bank and Charter Court Financial Services have agreed to a £1.6 billion merger to create a “leading specialist lender”.

Under the proposed deal, OneSavings would acquire all the issued shares of Charter Court with 0.8253 new OneSavings shares exchanged for each Charter Court share.

This will see Charter Court shareholders owning about 45% and OneSavings shareholders holding about 55% of the new combined group, which will be led by current OneSavings boss Andy Golding.

Both Charter Court and One Savings have recommended that their shareholders vote in favour of the deal at their respective investor meetings, with the merger expected to become effective in the third quarter of this year.

OneSavings chairman David Weymouth said the two firms have “demonstrated remarkable growth and returns in the specialist lending market segment over the last decade” and that the combination will “create a leading specialist lender that we believe will benefit from enhanced scale, product offerings and a robust and diversified funding platform”.

“Both businesses bring complementary strengths which we fully expect will position the combined business to continue to deliver for its customers and shareholders.

“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.”

Sir Malcolm Williamson, chairman of Charter Court, said: “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.”

Sir Malcolm will assume the chairmanship of the new group, while Mr Weymouth will become deputy chairman.

April Talintyre, currently chief financial officer of OneSavings, will retain her position as CFO of the combined group.

Charter Court’s boss, Ian Lonergan, will become integration director of the new company for up to 18 months to oversee the merger.

OneSavings also posted earnings and revealed that underlying pre-tax profit increased 15% last year to £193.6 million as the loan book grew 23% to £9 billion.

Statutory pre-tax profit increased to £183.8 million from £167.7 million.

Meanwhile, Charter Court reported a 40% increase in pre-tax profit to £158.2 million thanks to higher net interest income.

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