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BREAKING NEWS

BREAKING NEWS

UK competition watchdog probes Charter Court, OneSavings merger

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(Reuters) – UK competition watchdog said on Wednesday it was investigating the merger agreement between British lenders Charter Court Financial Services and OneSavings Bank.

The Competition and Markets Authority (CMA) said it was considering whether a merger of the two would substantially reduce competition.

The banks announced the merger in March that would create one of Britain’s biggest specialist lenders with a combined market value of 1.75 billion pounds.

OneSavings said then it would offer 0.8253 of its shares for each Charter Court share in a deal that has the backing of both boards as well as Elliott Management, Charter Court’s biggest investor.

The marriage marks a major step towards consolidation among “challenger banks” and gives the firms more heft to take on the biggest lenders in Britain.

The sector also faces a string of tax and regulatory changes, while margins remain constrained in a mortgage market where competition is high and growth elusive.

OneSavings, founded in 2011 as part of a private equity buyout of Kent building society KRBS, has been well protected so far by its focus on providing mortgage credit to professional landlords and tightened lending criteria for financing smaller developments.

(Reporting by Justin George Varghese in Bengaluru; editing by Saumyadeb Chakrabarty and Gopakumar Warrier)

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