GE Capital, the financial services arm of US giant General Electric, has acquired sub-prime lender igroup in a deal worth over £200m.
In a move which marks GE's first foray into the UK mortgage market, igroup is set to retain its existing management staff and brand name despite a chequered history.
GE Capital Europe president Charles Alexander says the company was not deterred from acquiring igroup by the months of negative publicity which has dogged the lender in the national press and media.
He says igroup's new system of controls and underwriting criteria alongside its recent acceptance into the mortgage code convinced him the lender will become a business of “impeccable standards”.
GE bought the firm from igroup's holding company, Malvern House Acquisitions.
It has also bought out the 49 per cent share held by Royal Bank of Scotland, which is understood to have been keen to offload its stake in the sub-prime lender for sev-eral months.
Alexander says: “This acq-uisition offers us a strong platform for growth and further strengthens our position in the consumer finance market.”
igroup chief executive officer Joe Dlutowski says: “Non-conforming lending is proving to be one of the fastest-growing sectors of the UK mortgage market and the relationship with GE will allow us to participate in this growth to the fullest extent.”
Pretty Technical Partnership partner Kim North says: “This move makes perfect sense for both. igroup has been well positioned for a takeover for some time now.”