Private equity groups cash in on loan growth at new UK banks

Private equity groups are offloading shares in British "challengers", cashing in as new banks list on the stock market and experience a surge in lending.

JC Flowers, the US-based private equity group, is selling part of its stake in OneSavings Bank days after the challenger reported growth in lending during the first quarter.

Funds managed by JC Flowers are offloading about 16m of shares in the bank in a bookbuilding process that is expected to close on Tuesday.

The share sale, which is being managed by Barclays' investment bank, will leave the buyout house with a 50.1 per cent holding in the lender.

It comes less than a week after OneSavings revealed a £445m surge in lending in the first three months of the year, accelerated by the acquisition of a £251m portfolio of second charge mortgages.

Andy Golding, chief executive of the bank, said: "Whilst we have seen increased competition in certain niche areas, the housing market remains supportive of buy-to-let mortgages." He added that the bank continued to see "attractive opportunities" for organic growth.

JC Flowers is the latest private equity group to sell a stake in one of the UK's fast-growing specialist banks.

Last month, funds run by US billionaire Wilbur Ross and Stanhope Investments raised £240m by selling 60m shares in Virgin Money at 400p.

The move to cut their holding followed a 50 per cent surge in Virgin Money's share price since it listed on the stock market last November at 283p.

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Private equity house AnaCap has a 53 per cent stake in Aldermore, which listed on the stock market in March following an aborted attempt to float last November.

AnaCap raised about £150m from selling a part of its stake on flotation, according to people familiar with the situation.

Pollen Street Capital, a private equity fund in which the Royal Bank of Scotland previously invested, has a 59 per cent majority stake in Shawbrook, which floated only weeks after Aldermore.

OneSavings Bank floated on the London stock market last June, raising £134m of which £41.5m was invested in the lender.

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