By John Reynolds on Monday 31 January 2022
Should Starling be successful, it would follow its purchase of Fleet Mortgages, as it further extends its footprint into mortgages.
Starling Bank is battling it out against Barclays and another high-street lender to buy mortgage platform Kensington, as it looks to ramp up its mortgage offering.
The Anne Boden-fronted bank is in the running to buy Kensington's platform, which serves its customers.
Kensington is backed by investment giants Blackstone and Sixth Street.
Kensington specialises in home loans to the self-employed and was put up for sale late last year after seven years in private equity ownership.
Its sale is expected to involve two separate transactions, with M&G and Pimco in the running to buy Kensington’s mortgage assets while Starling bids for the platform, according to Sky News.
The two deals are expected to be valued at over £1bn overall.
Starling's interest in Kensington first came to light late last year.
Kensington is currently one of the largest issuers in the residential mortgage-backed securities market, having issued $12bn of mortgages since 2015.
Should Starling be successful, it would follow its purchase of Fleet Mortgages last year, which marked its first purchase to date and its entry into the property-lending sector.
The £1bn purchase would add significantly to Starling’s loan book and likely boost its valuation.
At the time of its purchase of Fleet Mortgages, Boden said that the purchase was “the start of our move into mortgages as an asset class,” with Starling having primarily focused on SME lending up until then.
As well as pushing into the world of mortgages, Starling is looking to rival the high street banks in other sectors too.
Starling has been seen as one of the standout fintech performers during Covid.
The bank is also setting its sites on being a major challenger across SME lending.
Earlier this year, Boden confirmed the upcoming launch of Starling’s banking-as-a-service offering, as was exclusively first reported by AltFi last year.
The Starling founder said the project would see her bank offer up Starling’s technology for banks and financial institutions to harness.
Starling Bank declined to comment.
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