U.S. News

U.K. Lender Kensington Profit Up, Says No Approaches


British specialist mortgage lender Kensington Group reported a 17% rise in underlying full-year profit on Tuesday, but said tough competition will result in slower profit growth this year.

Kensington has been the subject of takeover speculation but its chief executive said it had not received any approaches. "If we had anything to say on that we'd have to announce it," John Maltby, Kensington's chief executive, told Reuters.

In response to a report its advisers were considering a sale, he said: "We're a Plc company and we have a strong organic strategy and that's our focus. Clearly if there were sale options we'd have to look upon that as any organisation would and compare it with the organic options that we've got."

Kensington, which provides mortgages to self-employed, older borrowers, people with poor credit histories and other non-traditional borrowers, said profit before tax and goodwill impairment in the year to the end of November was 65.2 million pounds ($127.6 million), up from 55.9 million a year before.

Pre-tax profit dipped to 49.1 million pounds, down 12% on the year, including the write-off of 16.1 million pounds related to goodwill on the sale of its direct-to-consumer distribution business TML.

Kensington said it had decided to sell TML for a nominal sum after a strategic review, which would leave it as a lower cost company with improved credit performance.

It said mortgage completions in the year to November rose 17% to 4.1 billion pounds, and its pipeline of new business at the end of the year was 20% higher than a year earlier at over 500 million pounds.

Maltby said competition had intensified from some of the big global banks such as Lehman Brothers and Deutsche Bank and other retail lenders.

"In terms of pricing for risk, we feel we've got that right, some people may feel that over time they're not pricing for risk," he said.