Britannia Building Society has announced its two intermediary-facing subsidiaries will merge in the new year.
Verso, the specialist lending arm of the society, and Platform Home Loans, the sub-prime lender acquired in February 2001, will come together in January 2003 under an as yet unnamed banner. It is hoped the integration will be completed by April.
The reason behind the merger is to close the product gaps between the two subsidiaries, such as the light-adverse market, where previously business was being lost.
David Tweedy, the current managing director of Platform, will run the new business.
He said: ‘The product gap between us is something that either one could fill. The only real difference is in prime, full-status products, but this is only a small part of the business we will be doing.’
The decision is not expected to damage either lender in the consolidation period as both have already gone beyond their predicted year-end targets.
But Gerald Gregory, managing director of Britannia’s non-member businesses, said both will continue to offer new products until the end of the year.
He said: ‘This is about providing clarity for intermediaries about who they should approach at Britannia. We will have a cascade underwriting service, where the aim will be to place the borrower within the group rather than returning the application to the broker if it does not fit the application. Few, if any, will be able to replicate this one-stop-shop offering.’
Steve Sandiford, head of product strategy at Birmingham Midshires Solutions, said: ‘We have shown the one-stop shop can work, and it is good to see others recognising this. It was not a surprise to see them doing this, as it makes a lot of sense to have the business under one roof, where underwriters can work together.’
Platform and Verso currently have a run rate of about £600m, and the new combined business is expected to have a rate of around £1.7bn.