CMA to probe merger of OneSavings Bank and Charter Court

The Competition and Markets Authority is to investigate the proposed merger of OneSavings Bank and Charter Court Financial Services. 

At this stage, the CMA is inviting comment on whether this tie-up would substantially reduce competition in the mortgage market. 

Interested parties have until June 19 to submit comments or objections. These will then be assessed before the CMA decides on any subsequent action. 

In March it was announced that OneSavings Bank and Charter Court were proposing a £1.6bn all share merger, creating one of the biggest specialist lenders in the UK. 

OSB runs the Kent Reliance brand, while Charter Court operates the Precise Mortgage brands. 

Under the terms of this proposed merger,  OSB shareholders would hold around 55 per cent of the combined group, with Charter Court shareholders holding the remaining 45 per cent. Current OSB chief executive Andy Goulding would head up this new larger lender. 

A statement released at the time of the proposed merger said the combined group planned to maintain the two current distribution platforms. 

The UK specialist lending market has faced a number of pressure in recent years, including a string of regulatory and tax changes, a dip in demand in the buy-to-let sector and renewed pressure on margins as competition has increased from mainstream lenders as growth in the mortgage market has slowed. 

In these conditions mortgage experts said consolidation offered specialist lenders like OSB and Charter Court the opportunity to deliver incremental profitability independent of market growth. 

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