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Mortgage book falls at Kensington

Kensington Group’s problems have continued as it revealed that its mortgage book has fallen and and its margins have been cut in its first quarter trading statement.

Chief executive John Maltby was replaced last month by Kensington managing director Alison Hutchinson. The firm, which is up for sale and in talks with a number of interested parties, also announced its latest profit warning in a submission to the Stock Exchange.

Total new business completions for the group, which includes Kensington Mortgages, Money Partners & Start, was 855m, a rise of over 4 per cent compared with the same period in 2006, However, the mortgage market as a whole grew by 20 per cent last year.

The value of Kensington’s mortgage book was 6.9bn at the end of February this year, down from 7.2bn at the end of November 2006.

The average gross margin for first-charge new business was down to 2.6 per cent from 2.9 per cent in the same period in 2006.

Money Partners has a slow start to the year with completions down by 12 per cent.

On the plus side, asset quality across the group remained strong, with performance ahead of management expectations, while the broader product range at Kensington Mortgages that includes specialist prime is said to have been well received by the market.

Kensington said: “We remain in a competitive market and more customers are redeeming mortgages after the end of the early redemption charge period. There are a number of factors that may have an impact the expected profit for 2007 and the outcome therefore remains uncertain.”

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