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Investec looks to offload mortgage arm Kensington

Investec is looking at a potential sale of its UK intermediary mortgage arm Kensington Mortgages after receiving “certain expressions of interest” in the business.

In an interim management statement last week, the group said it had appointed Fenchurch Advisory to conduct the process but added there was “no certainty a sale will take place”.

An Investec statement says: “Investec is exploring a potential sale of Kensington, the group’s intermediary mortgage business in the UK, having received certain expressions of interest. Investec has appointed Fenchurch Advisory as its adviser to conduct this process. There can be no certainty any sale will take place.”

The firm’s asset management arm reported net inflows of £2bn while the wealth and investments division saw inflows of £1.1bn for the nine months ended 31 December 2013.

The firm adds its asset management arm had seen assets depreciate do to the poor performance of the rand against the pound, reducing the value of assets brought in from South Africa.

The rand fell from 13.8 to the pound at the end of 2012 to 17.4 at the end of 2013.

Third party assets under administration fell 2 per cent to £108bn whilst customer accounts decreased by 10 per cent to £22.1bn.

Kensington spokesman Alex Hammond says it remains business as usual at the lender and that it was optimistic about a future sale. 

He says: “The mortgage market has been through a difficult few years. We are now on the cusp of a great opportunity and we are looking forward to growing the business.” 

Chadney Bulgin mortgage partner Jonathan Clark says: “We do need more niche lenders so if Kensington is bought out and reinvigorated, that is certainly a good thing for the market.”

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