Co-op Bank hands mortgage business to Capita

THE Co-operative Bank is to hive off the management of its mortgages to outsourcing group Capita.

As part of the deal Capita is acquiring Co-op’s mortgage administration business Western Mortgage Services and will take on 250,000 customers who have borrowed a total of £23bn.

Capita said the arrangement would be worth £325m over 10 years from early 2015.

It will affect 660 staff in Leek and Plymouth who will transfer to Capita which plans to invest in new systems “to improve the experience for The Co-operative Bank’s customers and support business growth”.

Capita’s chief executive Andy Parker said: “Retail banking is facing unprecedented business and regulatory challenges and Capita is therefore focusing strongly on developing capacity to support this market.

“We have recently acquired Crown Mortgage Management and can draw upon our existing and wide ranging commercial debt-servicing capabilities and our heritage of large scale customer service transformation across a range of industries facing similar challenges. Capita would work with The Co-operative Bank to deliver an enhanced service for customers, by, for example, using analytics and insight to give them the experience they want and expect from their mortgage provider.”

The bank’s chief executive Niall Booker said: “It is vital we improve our processes, consolidate and utilise up to date mortgage systems and, as a smaller bank, ensure we can respond nimbly in a competitive market, mindful of the impact of increased regulation to our cost base.

“These proposals to partner with Capita would support our plans for growth in retail mortgages and would enable us to continue to deliver high standards of service to our customers and brokers.”

The deal is subject to final approval by the bank’s board and by the Financial Conduct Authority.