LONDON, UK: Secure Trust Bank PLC (STB) has agreed to sell a portfolio of mortgage loans to Jacqali Designated Activity Company, a financing vehicle established by a global financial institution, a news release said.
This sale represents STB’s full exit from the residential mortgage market, which STB withdrew from in 2019.
The consideration for the sale is estimated at £54.6 million, subject to reconciliation, payable in cash on completion. The cash purchase consideration for the portfolio was calculated based on an agreed price (including a premium to net book value) for the portfolio as at 31 December 2020, adjusted for cash receipts STB received from the portfolio during the period from then up to the date of completion.
The obligation of the purchaser to pay the consideration is backed by the global financial institution.
The net book value of the portfolio as at 31 December 2020 was £77.7 million. The portfolio contributed £1.95 million including allocated costs to STB’s profit before tax in FY2020, on an unaudited basis.
The sale is in line with STB’s strategy to focus on specialist lending segments offering higher yields. The capital released is intended to be reinvested into STB’s remaining businesses and for other general corporate purposes.
The sale and purchase agreement contains warranties and indemnities, as well as a purchase price reconciliation mechanism, which are each customary for a transaction of this nature.
David McCreadie, Chief Executive Officer, commented: “The disposal is in line with STB’s strategy of maximising value, simplifying the Group and focusing on the areas of the business that have the strongest prospects for delivering sustainable and profitable medium to long-term growth. The proceeds will be used to strengthen STB’s capital position, provide additional financial flexibility to deliver its growth strategy, and ultimately enhance returns for shareholders.”
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22 Jul, 4:30 pm GMT+1 ·Disclaimer