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Close Brothers considering setting up lender

Close Brothers, owners of network Mortgage Intelligence, are considering setting up a lender at the end of 2006, with a set decision due early next year.

The news has created concerns as to whether the group would be creating a conflict on interest by having both a network and a lender in the group.

Bob Golden, a director of Close Brothers and chairman of Mortgage Intelligence is believed to be have been given the task of setting up the lender for the group.

Sally Laker, managing director of Mortgage Intelligence says that it is one option that the Close Brothers are considering after its strategic look at the company. However she stresses that this would be completely separate from Mortgage Intelligence.

She says: The company has taken a strategic look at what is out there, and setting up a lender is one option, however theres certainly been nothing decided. If the decision were to be made it would be in the first quarter of next year. However the business would be completely separate from Mortgage Intelligence.

And Bob Golden, director of Close Brothers, says: “We regularly conduct strategic research into various types of business. We have conducted a strategic review of mortgage market, of which setting up as a lender is an option – but we have not made a decision on that and wont until the first quarter of 2006.

“The thing to underline here is we do this all of the time in other markets and institutions, so it really is nothing out of the ordinary.”

However, one industry source says: “If It were setting up as a lender the Financial Services Authority would take a dim view of them working in collusion with each other.

Dev Malle, head of operations at Pink Home Loans says that although it would not be a first in the market for a company to have both a lender and a packager, it might raise concerns.

He says: If it does set up a lender it would not be the first time that a company has had two successful operations. The Manchester has both a lender and a network, so it wouldnt be unique.

It will be interesting to see how other lenders will feel about it setting up a lender alongside the network. It might be seen as a conflict of interest and there may be worries that it might favour its own lender.


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