Sale of offshore business

6 Mar 2007 07:06

Portman Building Society06 March 2007 Press ReleaseFor Immediate Release6 March 2007 SCARBOROUGH BUILDING SOCIETY TO BUY PORTMAN'S GUERNSEY BASED DEPOSIT-TAKING BUSINESS Portman Building Society ('Portman') and Scarborough Building Society ('Scarborough') today announce that Scarborough has agreed to acquire the entireissued share capital of Portman's Guernsey based offshore deposit-takingbusiness Portman Channel Islands Limited ('PCIL'). PCIL has a geographicallydiverse deposit book of circa £600 million and approximately 8,000 customers. The transaction is expected to be completed by the end of April 2007, subject tothe necessary regulatory approvals. Following a strategic review of Portman's approach to retail deposit-taking,which was announced in November of last year, it was concluded that PCIL was nolonger core to the Portman Group's activities. Following completion of the transaction, PCIL will be rebranded and will,subject to approval, continue trading as Scarborough Channel Islands Ltd ('SCIL'). Scarborough has confirmed that PCIL's existing management team andstaff will continue in their roles and will be instrumental in the developmentand expansion of the business. As there is no investor protection scheme in Guernsey, Scarborough is providinga parental guarantee in respect of PCIL's liabilities, similar to that providedby Portman Building Society up until completion of the transaction. Thisparental guarantee from Scarborough will replace the parental guarantee fromPortman Building Society from the date of completion of the transaction, meaningthat customers will continue to benefit from the security offered by a top 20 UKbuilding society. PCIL customers will be written to by PCIL in the next few days and again byScarborough on completion of the transaction. Scarborough has confirmed thatthere will be no changes to the terms or conditions of existing PCIL accounts oncompletion of the transaction. Robert Sharpe, Chief Executive of Portman Building Society said: 'PCIL hasserved the Portman Group exceptionally well and I am delighted that we havefound a new and committed owner in Scarborough. It is good news not only forScarborough, but also for PCIL customers, as we have managed to agree a dealthat allows Scarborough to enter this exciting market whilst providing PCILcustomers with the security offered by another leading UK building society.' John Carrier, Chief Executive of Scarborough Building Society said: 'I am verypleased to announce this agreement to acquire PCIL, which represents asignificant strategic investment for the Scarborough Group. The acquisition willbe complementary to our existing subsidiaries and the fact that the businesswill remain within the building society sector is excellent news for the staffand customers of PCIL. The transaction also demonstrates the confidence we havein relation to our future as a successful independent mutual organization.' -ENDS- Editors' notes: About Portman Building Society Portman Building Society is the third largest UK building society and 13thlargest UK mortgage lender. In the period 2000 to 2005, Portman was the fastestgrowing top ten building society in terms of total assets. The Portman Group employs over 2,500 people, serves 1.8 million members and, asat 31 December 2006, had total assets of £21.3 billion. In 2006, Portmanachieved net retail inflows of £886 million and had savings balances of £13.4billion, up 18% on 2005. On 12 September 2006, the Boards of Nationwide and Portman Building Societiesannounced that they had agreed to merge. The proposed merger is expected tobecome effective by the end of August 2007, subject to approval being given byPortman members and to confirmation by the Financial Services Authority. About Portman Channel Islands Limited Portman Channel Islands Limited is based in the Bailiwick of Guernsey and is theoffshore deposit-taking arm of Portman Building Society. PCIL is a wholly ownedsubsidiary of Portman and is regulated by the Guernsey Financial ServicesCommission. PCIL employs 10 people and operates largely as a standalone business, with highlevel strategic objectives set by the Portman Board and the day-to-day operationof the business managed by the PCIL Board. In the year ended 31 December 2006, PCIL delivered pre-tax profit of £2.1million. About Scarborough Building Society Scarborough Building Society is the 18th largest building society in the UK,with assets under management of over £3 billion. The Scarborough BuildingSociety Group is made up of Scarborough Building Society (SBS), ScarboroughMortgage Services (SMS), which administers mortgages for major clients and NorthYorkshire Mortgages (NYM). NYM is the Group's mortgage asset trading company andincludes the Scarborough Specialist Mortgages (SSM) brand, which offersnon-conforming and specialist mortgages. SBS has a network of 9 branches in Yorkshire, Lincolnshire, the East Midlandsand the North East. Its contact centre, Scarborough Direct, offers telephone andpostal account services throughout the UK. The Society has 160,000 customers. The SBS Group employs over 300 people and has modern, purpose built offices onthe outskirts of Scarborough, North Yorkshire. SSM also has an administrativeoffice in the centre of Leeds, West Yorkshire. For further information please contact: Portman Building Society Robert Sharpe, Chief Executive+44 (0)1202 562256 Gleacher Shacklock LLP, advisers to Portman Building SocietyJohn Williams+44 (0)20 7484 1150 Lynsey Hallam, Group Press Officer +44 (0)1202 562256 Scarborough Building Society John Carrier, Chief Executive +44 (0)1723 504 211 Tracy Fletcher, Group Press and Public Relations Manager+44 (0)1723 504 219 (Mobile: 07973 693376) This information is provided by RNS The company news service from the London Stock Exchange