Shawbrook is reportedly weighing up a merger with rival Aldermore after its owner put the challenger bank up for sale.
The lender, which debuted on the London Stock Exchange last year, is in the early stages of considering a takeover, according to Sky News’ Mark Kleinman.
South Africa-based financial services group Firstrand, which bought Aldermore for £1.1bn in 2017, took the decision last month to put the British bank up for sale after it was forced to set aside £750m in connection with the UK’s motor finance redress scheme.
The £9bn scheme devised by the Financial Conduct Authority (FCA), set to award compensation to motorists who were missold car finance, was branded “disproportionate and unfair” by Firstrand, which moved to offload Aldermore because it was “cognisant of protecting shareholder value and ensuring Aldermore’s future success.”
Shawbrook, which has seen its shares slide since its October London IPO, would likely rely on external finance to fund any deal, which could also be blocked if major shareholders are unimpressed with the terms of any merger.
Shawbrook declined to comment to Sky News.
This story is developing, more to follow