Charter Court sells residual stake in Charter Mortgage Funding for £13.8m

Challenger bank Charter Court Financial Services on Wednesday said it was selling its residual interest in the Charter Mortgage Funding 2018-1 plc securitisation for £13.8m.

CMF 2018-1 is the group's latest securitisation and is due to complete on 8 June 2018. The Transaction is expected to settle before the end of June 2018.

Charter said the deal will generate a pre-tax gain of £21.3m which will be recognised in the first half of 2018 and will also result in a reduction of mortgage assets and associated risk weighted assets of the group of approximately £285.5m and £100m, respectively.

“The associated increase in the group's core equity tier 1 capital resources will be invested to support new loan originations in its specialist lending segments and ongoing business activities. The securitised mortgage assets yielded interest income of £1m in May 2018,” Charter Court said.

It added that it remained on track to meet its net loan book growth target of at least 20% in the medium term, adjusting for sales which result in a de-recognition of assets.

Chief financial officer Sebastien Maloney said the proceeds from the transaction would be invested in pursuing further growth opportunities.

“As we set out at our Q1 2018 trading statement, we have had a strong start to the year and remain confident of achieving our stated financial targets," he said.