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C&G quits equity talks with Brain

Cheltenham & Gloucester has unexpectedly broken off equity-stake negotiations with Mortgage Brain&#39s owner lenders after completing due diligence with the trading platform.

C&G says it will not be pursuing a place on Mortgage Brain&#39s board – which includes lenders Nationwide, Halifax and Alliance & Leicester – and will concentrate its resources on developing its in-house systems.

Mortgage Brain director Mike Green says C&G decided to ditch its plans after realising it could access most of the technology it requires without having to acquire an equity stake.

Mortgage Brain&#39s non-equity deal provides lenders with all the platform&#39s IT developments and can generate preillustration documentation to comply with forthcoming FSA regulations.

Green says this package and the fact C&G is still committed to the platform – it says it is pursuing becoming a non-equity member – has convinced him it simply decided there was no need to secure a share in the company. He says: “Mortgage Brain&#39s non-equity contract is very generous and I think C&G probably realised they could get most of what they want without the expense of taking an equity stake.”

C&G spokeswoman Esther O&#39Reilly-Kane says: “We were already planning a substantial amount of re-engineering internally and we want to concentrate our resources on achieving that before making this type of decision. This bears no reflection on Mortgage Brain.”

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