Starling will become the sole funder of future originations for Fleet Mortgages, allowing Fleet to build on its lending operation by securing access to Starling’s deposit base. Day-to-day operations at Fleet continue unchanged with the company’s existing management team still in charge of the lender.
To date, Fleet has originated £2.3bn of mortgages and experienced zero credit losses. It currently has circa-£1.75 billion of mortgages under management.
The acquisition is part of Starling’s wider plan at the bank to expand lending through a mix of strategic forward-flow arrangements, organic lending and targeted M&A activity.
Bob Young, Chief Executive Officer at Fleet Mortgages, commented: “We are very pleased to be announcing the acquisition of the business by Starling Bank which will deliver a significant benefit to our company, our intermediary partners and their landlord clients, particularly in terms of reduced cost of funds providing us with the ability to deliver highly-competitive products.
“It is certainly exciting times ahead for everyone associated with Fleet and, with new, ambitious shareholders on board, it allows us to potentially move into new product sectors and further grow our market share. This acquisition opens up a range of opportunities that otherwise wouldn’t be available to us.
“We started Fleet Mortgages seven years ago and have grown to become a successful mortgage originator with nine well-received securitisations. 2021 is set to become our best year yet with new mortgage loans running at £800 million and half-year pre-tax profits of £4 million.
“Starling Bank will take over all of our funding, allowing us to focus on achieving our significant and ambitious lending and growth targets. This is a natural progression for our lending business, with both Starling and Fleet sharing a very similar cultural fit and provides us with a very strong lending base from which to work from and to deliver for our staff, our adviser partners and our landlord customers.”
Anne Boden, CEO of Starling Bank, said: “The acquisition of Fleet Mortgages is the start of our move into mortgages as an asset class and builds on a number of forward-flow arrangements that we’re doing with leading non-bank lenders.
“Fleet’s existing management team will remain in place and Fleet will continue to operate as a stand-alone company, keeping the original name and brand. We’re buying Fleet because it is very good at what it does, not because we want to change it.”
