South African bank Investec has agreed to sell its Irish sub-prime mortgage business Start Mortgages to American private equity firm Lone Star Funds to simplify and reshape its banking business.
The deal includes Start Mortgages’ mortgage origination platform, brand, operations and employees.
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For the year ended 31 March 2014, Start posted a loss before taxation of £21m and had gross assets of £540m and approximately 70 employees.
The deal comes a week after Investec announced plans to sell the UK subprime mortgage lender Kensington to private equity owners Blackstone and TPG for £180m.
Investec has been hit by the sharp fall in property prices in Ireland and was forced to take substantial impairment charges for its losses here. The bank said the sale of the Irish loan book would have a marginal negative impact on capital ratios.
The deal, which is subject to regulatory approval, is expected to complete towards the end of this year.
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