Starling Bank is on the verge of acquiring a £500 million mortgage book from specialist lender Masthaven.
Citing people familiar with the matter, The FT reports that Starling is bidding to diversify lending away from the government-backed Covid-19 loans that constitute most of its assets.
The bank has come under fire from former fraud minister Lord Agnew who alleged that it was one of the worst for preventing fraud in the government-backed loan scheme. Starling chief Anne Boden has written to Agnew asking him to withdraw his comments or face the threat of legal action.
Starling has already bought the loan book of buy-to-let specialist Fleet Mortgages for £50 million and a home loans portfolio worth about £1 billion from Kensington Mortgages.
Masthaven’s mortgage sale process follows its announcement earlier this year that it was withdrawing from UK banking. The lender, which acquired a banking licence in 2016, said it took the decision after realising a “significant” amount of long-term capital was required for its future growth plans.