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FirstRand lining up advisers for sale of Aldermore - report
(Sharecast News) - South Africa's FirstRand is reportedly lining up advisers to oversee a sale of challenger bank Aldermore after expressing outrage at the terms of a compensation scheme for car finance mis-selling. According to Sky News, the lender has hired Rand Merchant Bank and is in the process of appointing Bank of America to a joint mandate.
FirstRand said last week that it would seek to sell Aldermore and exit the UK banking market after the Financial Conduct Authority unveiled the details of a £9.1bn compensation scheme.
Aldermore, which has a sizeable presence in the motor finance market through its subsidiary MotoNovo, has been forced to increase its compensation provision by over £500m due to the regulator's proposals. The additional hit took Aldermore's total redress bill to £750m.
FirstRand said last week: "Cognisant of protecting shareholder value and ensuring Aldermore's future success, the group will work with Aldermore's board and respective regulators to facilitate an orderly ownership transition.
"FirstRand remains firmly of the view that for the group, the final redress scheme proposed by the FCA is disproportionate and unfair."
Rival banking groups and private equity firms are now expected to explore offers for Aldermore, with a process likely to be concluded later this year, Sky said.
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