Mortgage market revival?
Reports are claiming that the Blackstone Group, which includes real-estate investment, hedge-fund management and financial advisory among its areas of expertise, is considering a move into personal banking.
The private equity giant has applied for a British banking license, Reuters reported, citing sources familiar with the matter.
Blackstone is reportedly seeking license that would allow it to take deposits in Britain through a new bank it plans to call the Home and Savings Bank.
Blackstone, one of the worlds leading buyout firms, is working alongside fund manager Cambridge Place on the venture, Reuters said.
The new bank could be up and running in the first quarter of the year, one of the sources told Reuters, though approval from the Financial Services Authority can take up to 12 months.
The rationale is that with the banking industry under pressure in the U.K., there is a window for a very traditional banking model focused on savings and mortgages.
A shake-up of the British banking sector - not least due to a forced sell-off of over 900 branches by bailed-out lenders and government support for increased competition - has attracted dozens of potential bidders and new entrants, seeking to capitalise on what is seen as a window of opportunity.
Blackstone is expected to put £200 million into the new venture and the Pears family a further £50 million, with Cambridge Place making a small investment, Reuters said.
Cambridge Place is also reportedly speaking to other potential investors, which could include private equity and blue chip institutional investors, about investing in the planned bank.
A former Abbey chief executive, Peter Birch, has been lined up to become the banks chairman, Reuters said, citing one of the sources.
While Blackstone acted as an adviser to nationalised Northern Rock in 2007, few private equity firms have ventured into the traditional banking sector due to the scale of investment needed.
Posted by Graham Lock - 22/01/2010 14:20:40
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