In order to increase its presence in the British housing market, Barclays has agreed to pay approximately 2.3 billion pounds ($2.8 billion) for the specialty lender Kensington Mortgage Company.
The purchase is one of Barclays’ most recent deals and a huge wager on the real estate market.
Even though homeowners have been under pressure from severe inflation, British property prices have increased recently. However, industry analysts expect that they will begin to decline later this year.
Blackstone and Sixth Street, the owners of Kensington through private equity, are selling it.
The size of Kensington’s mortgage portfolio at the time the purchase closes will determine the ultimate price, according to a statement from Barclays on Friday. According to Barclays, the portfolio will likely contain about 2 billion pounds’ worth of mortgages.
Early trading saw a slight increase in Barclays shares before a 0.5 percent decline, about in line with the European banking stocks index.
Despite purchasing a $3.8 billion credit card portfolio last year that was co-branded with the clothing retailer The Gap, Barclays has been somewhat cautious about acquisitions lately.
The lender anticipates concluding the Kensington deal either later this year or early next year.
With 600 employees, Kensington specializes in offering mortgages to those with complicated incomes, such as independent contractors.
According to Barclays, the purchase would be financed using already-available funds and would cause a 12 basis point decrease in core capital ratio.
According to Matt Hammerstein, CEO of Barclays Bank UK, the deal “reinforces our commitment to the UK residential mortgage sector and gives an intriguing opportunity to enhance our product range and capabilities.”
