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Kensington rocked as it loses chief executive

Kensington has lost its second chief executive in the space of a year after it confirmed Alison Hutchinson would be leaving the lender at the end of March.

There has been mounting speculation over the firm’s future direction after its takeover by Investec in August and the subsequent pressures as a result of the liquidity crunch that hit soon after.

The lender, seen as a pioneering non-conforming lender in the UK mortgage market, has had a tough time over the last 12 months. Last March, former chief executive John Maltby made a shock departure as the firm issued a profit warning.

At the time, the lender warned investors that “profits in later years are likely to be below current market estimates”.

In the first half of 2007, the lender saw a fall in profits and a £10m write-down of its investment in specialist lender Money Partners. Its first-half profits fell to £26.1m from £28.4m the previous year.

As the liquidity crunch made its impact on the UK mortgage market, Kensington was forced to change its strategy and announced in November that it was withdrawing from the sub-prime market in order to concentrate on the prime sector.

It also made the decision to cut its workforce by 20 per cent.

In a statement, Kensington says it will now report directly to Investec capital market division head of principle finance Andy Clapham. Hutchinson will stay on until April in order to ensure management continuity.

A spokesman for Kensington says it is not looking to make an external appointment to take Hutchinson’s place. Industry commentators won’t be surprised by this comment as sources have suggested that Investec’s strategy for Kensington still remains unclear especially in the current climate.

But Kensington’s spokesman insists that Investec is still keen on Kensington as a brand and was part of the bank’s decision to buy the lender last year.

Another surprise resignation this week is Derbyshire Building Society chief executive Peter Richardson, who has decided to take early retirement.

This comes after the recent decision by rating agency Moody’s to put the building society on watch for a possible downgrade due to its exposure to sub-prime mortgages,

Derbyshire has appointed non-executive director Graham Picken to take over with immediate effect.

Meanwhile, other news in the market has seen the Association of Mortgage Intermediaries director Chris Cummings announce that it is to hold an event – planned for May – to encourage new, flexible lenders into the UK mortgage market.

Speaking to Money Marketing at the Mortgage Business Expo in Belfast, Cummings said he is in negotiations with countries such as China and Singapore to try and showcase to them the UK mortgage market.

He said the event has already got the backing of the Treasury and it will be announcing a line up of politicians and Bank of England staff in the coming weeks who have agreed to speak at the event.

Cummings told MM: “We have to start doing positive things. There is so much negativity around the mortgage market. We have this great market where people want to get homes and all that is happening is that we are talking ourselves into this mortgage market crisis.”


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