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Charter Court and OSB agree terms of merger

Simon Thompson | 11:50 Thursday 14th March 2019

The boards of OneSavings Bank PLC (OSB) and Charter Court Financial Services Group PLC have reached an agreement on the terms of a recommended all-share combination.

Charter Court shareholders will own approximately 45% of the combined group, with an exchange ratio of 0.8253 new OSB shares for each Charter Court share. 

David Weymouth, chairman of OSB, said: "I am very pleased that we are today announcing the combination of OSB and Charter Court, two businesses that have demonstrated remarkable growth and returns in the specialist lending market segment over the last decade.

“The OSB board and management team have built a strong, customer-focused approach that we believe can develop from strength to strength through the combination with Charter Court and continue to grow the businesses within the fragmented specialist lending segment."

The boards of Charter Court and OSB believe that the combination has a strong strategic rationale, which would create a leading specialist lender in the UK with greater scale and resources and presents an opportunity to maintain two leading, independent distribution platforms to create an “enhanced” proposition to the broker community.

Malcolm Williamson, chairman at Charter Court, said: “The strategic fit of the two banks is compelling and will bring together complementary strengths and capabilities to enhance our customer proposition and create a leading specialist lender that is very well positioned to deliver sustainable returns and take advantage of future growth opportunities. 

“Since Charter Court's foundation in 2008, the Charter Court management team has achieved a tremendous amount in building Charter Court into one of the UK's leading specialist banks. 

“To now be bringing together the complementary strengths of Charter Court and OSB is a great opportunity and excellent base from which to continue a growth strategy.”

The merger comes as the specialist banks released their preliminary results. 

Charter Court saw profit before tax increase by 41.6% to £158.2m (2017: £111.7m) and loan book growth of 24.2% to £6.7bn (2017: £5.4bn) for the year ended 31st December 2018

Ian Lonergan, CEO at Charter Court, said: "In our first full year as a listed company, we again continued to meet or exceed all our guidance and targets as we demonstrated the capability of our specialist lending platform to drive significant growth from the increasing sophistication and professionalisation of demand in our chosen buy-to-let and specialist residential mortgage markets.”

OneSavings Bank’s preliminary results for the year ended 31st December 2018 revealed that underlying profit before tax increased by 15% to £193.6m (2017: £167.7m), and loan book growth of 23% to £9bn (2017: £7.3bn).

Andy Golding, CEO at OneSavings Bank, said: “While the economic effect of Brexit may impact some business opportunities, OneSavings Bank is positioned well, with a strong balance sheet, an excellent track record in raising and retaining retail funds and a high-quality secured asset portfolio. 

"I am delighted that OneSavings Bank delivered excellent shareholder returns in 2018. 

“Our core buy-to-let segment continued to grow, attracting our target professional landlords, and our commercial business is flourishing, reflected in strong new business volumes in the year”

Andy has been confirmed as the CEO of the new combined group.

The specialist banks revealed earlier this week that they were in advanced talks regarding a possible merger.

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