Bluestone Group sells UK mortgage operations to Shawbrook Group

Bluestone Group, the European financial services business headquartered in the UK, announced today that it has agreed terms for the sale of its UK mortgage lending and portfolio servicing operations, Bluestone Mortgages Limited (‘BML’) to Shawbrook Group plc. Under the terms of the transaction, Bluestone’s holding company will sell 100% of the shares of BML and its subsidiaries to Shawbrook in a cash and share transaction. The transaction is subject to regulatory approval.

Bluestone Mortgages was established in 2014 with the acquisition and re-branding of Basinghall Finance Limited in a joint venture with Australia’s Macquarie Group. BML quickly became a leading player in the UK’s specialist residential mortgage market, consistently scoring strongly in terms of broker satisfaction, service levels and its contemporary technology stack delivered by sister company, Fignum Ltd. Following completion of the transaction, which is expected in Q2, 2023, the business will continue to trade under the Bluestone brand and day to day operations will be led by the company’s existing management team.

BML has historically funded its originations via platform lending relationships with Shawbrook and other banks, and securitisations under the Genesis shelf. The business has originated over £1.8bn since its launch, and currently manages a book of over £1.3bn residential loans.

Commenting on the transaction, Bluestone Group’s Chairman, Alistair Jeffery, said: “We are very pleased to have agreed terms for the sale of Bluestone Mortgages to Shawbrook, with whom we’ve had a strong relationship for many years. Under Shawbrook’s ownership, we’re confident the business will continue to flourish, delivering strong outcomes to the increasing number of customers that fall outside mainstream
criteria. Post completion, we look forward to becoming a Shawbrook shareholder and maintaining our relationship with Bluestone Mortgages via our technology business, Fignum. I’d like to thank Andy Cumming, BML’s Chairman since inception for his careful and thoughtful oversight of the business, and I wish Steve Seal, BML’s CEO and the entire team well in this exciting new chapter for the business”.

Steve Seal, Bluestone Mortgages’ Chief Executive Officer said:

“This transaction is great news for BML, our intermediary partners and for our customers. Shawbrook have been a long standing strategic partner for many years and joining the Shawbrook family is a natural step as we continue to grow and develop the business.

We have exciting growth plans and the support available from Shawbrook will help to accelerate these, enabling BML to provide innovative lending solutions to the growing number of customers who will need the support of a specialist mortgage lender.

One element of our growth strategy is to leverage the transformative power of technology to improve customer outcomes, and to make the homeownership journey as seamless as possible via our new loan origination platform BlueSky, created for BML by Fignum Ltd.

I am proud to have led the fantastic team at BML for the last four years during which time we have created an innovative, thriving and customer centric business. The success we have enjoyed during this period could not have been realised without their efforts and the support of our intermediary partners for which I am very grateful. ”

Marcelino Castrillo, Shawbrook Group’s Chief Executive Officer, commented: “We are delighted to have strengthened our long-standing and successful partnership with BML through this acquisition. BML is a well-established brand in the UK specialist residential mortgage market, and by bringing the two organisations together, we can use our combined capabilities and scale to offer an even stronger proposition to UK
homeowners.

Driven by increasing numbers of people choosing to work for themselves or in sectors where incomes are complex, we anticipate significant long-term growth in the specialist mortgage market. With both Bluestone Mortgages and The Mortgage Lender brands combined with Shawbrook’s strong and stable balance sheet, the Group is very well placed to consistently meet this growing demand.”

Mr Jeffery attributes some of Bluestone’s historical success to systems developed by its technology business, Fignum1, headquartered in the technology hub based around the Cambridge train station. Fignum was established by Bluestone Group in 2019 to develop contemporary loan origination, servicing and receivables management solutions to the other group businesses, and external customers. Its origination products, BlueLink and BlueSky, have handled over £3b of loan applications, automating labour intensive processes and vastly improving loan origination efficiency. Its servicing product, Boss, supports a wide variety of secured and unsecured asset types, delivered from resilient cloud environments. Fignum has recently launched Paycada, a receivables management system which connects to cloud based accounting packages, and improves the efficiency of accounts receivable management.

Bluestone Group was advised by Mills & Reeve and Taylor Vinters. Shawbrook Group were advised by Ashurst and Deloitte.

ENDS

For further information please contact:

Alistair Jeffery – Chairman, Bluestone Group

E: alistair.jeffery@bluestone.co.uk

M: (IT) +39 331 442 0360  (UK) +44 7500 839 400 

Peter McGuinness – Managing Director, Bluestone Group

E: peter.mcguinness@bluestone.co.uk

M: +44 7436 564 585 

Editors Notes:

Bluestone Investment Holdings Limited (Bluestone Group) is an innovative European financial services business with its headquarters in Cambridge and offices in London, Sheffield and Dublin.

Founded in 2000, Bluestone employs a team of around 200 professionals and specialises in loan origination, financial services technology, consumer loan purchase and portfolio servicing. The business is owned by a mix of private and institutional shareholders including interests associated with founder, Mr Jeffery, Australia’s Macquarie Group and the management team.

Further information can be found at www.bluestone.co.uk

Fignum is a UK fintech business headquartered in Cambridge that was spun out of Bluestone Group in 2019. Fignum employs over 20 IT professionals in the UK and has additional offshore development presence in Portugal and Ukraine.

Fignum’s passion is simplifying and automating complex business processes using contemporary cloud based technologies. The business has a number of innovative products including loan origination and workflow systems (BlueSky and BlueLink), loan servicing systems (Boss) and accounts receivable management systems (Paycada).

Shawbrook is designed to accommodate individuality, diversity and the dynamics of the modern world. We are driven by our purpose, to power up ingenuity to create opportunity, every single day. Leveraging strong digital capabilities to complement deep human expertise, our ‘best of both‘ proposition is ideally placed to provide personalised financial solutions to those with immediate and often complex needs. We offer a diversified range of practical lending and savings products across three customer franchises to serve consumers, businesses and real estate professionals. Our advanced digital platform enables us to provide a differentiated proposition to an expanding customer base. Our multi-channel distribution and end-to-end digital capabilities are empowered by our expert talent and partnerships with a range of leading FinTech and data providers to deliver best- in-class customer experiences.

The Group’s lending activities are primarily funded by a stable retail deposit book consisting of easy access and ISA accounts, variable rate notice accounts and fixed rate fixed term accounts (mostly one – five years). Shawbrook Bank Limited is an operating entity of Shawbrook Group plc. Shawbrook Bank Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority and is a member of the Financial Services Compensation Scheme.