The American private equity firm, which recently bought a stake in Kent Reliance, is to move on to what one source called its “Plan B” after it lost out to Virgin Money in the £1bn auction for the state-owned bank.
The move also follows its failure to buy Principality, which it had hoped to merge into its OneSavings Bank vehicle, which was formed from its acquisition of Kent Reliance last year.
Rather than buy mutuals the firm is opting to buy books of mortgages. JC Flowers is understood to be in discussions with a number of banks about buying books of mortgages already, ranging from tens of millions to hundreds of millions of pounds.
The assets will be transferred into OneSavings, the firm’s primary UK vehicle.
It is not known which institutions JC Flowers is in negotiations with although the majority of the major high street banks are keen to offload parts of their mortgage books to free capital, says the Daily Telegraph.
