The proposed deal is worth £325m to Capita and will start in the first quarter of 2015. It involves 660 Co-op mortgage staff transferring to the firm from the bank’s Leek and Plymouth offices with no job losses.
As part of the arrangement, which is subject to approval by the FCA and Co-op board, Capita will take over Co-op’s existing mortgage administrator, Western Mortgage Services.
Capita says it will install new systems to work with 250,000 mortgage customers and brokers through Co-op’s intermediary lending arm, Platform.
Capita is being supported by Unisys and Vertex Financial Services, providing the servicing and mortgage origination platforms respectively. The firm will now have £28bn mortgage assets under management.
Co-op Bank chief executive Niall Booker says: “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.”
Capita chief executive Andy Parker says: “Retail banking is facing unprecedented business and regulatory challenges and Capita is therefore focusing strongly on developing capacity to support this market.
“Capita would work with The Co-operative Bank to deliver an enhanced service for customers, by, for example, using analytics and insight to give them the experience they want and expect from their mortgage provider.”