Chief executive waves Kensington goodbye as profits fall
Kensington Group, the sub-prime mortgage lender, has issued a profits warning and announced that its chief executive is to leave the company soon.
The company said that increased competition in the sector, and the number of borrowers behind with their mortgage repayments (9.8% of its borrowers are more than 90 days behind with their payments), had precipitated the warning.
The sub-prime mortgage sector generally, catering for people with lower credit ratings and unusual employment patterns, is under the cosh, with problems at the US lender New Century sending shockwaves around the world.
However, Kensington said that the increase in arrears is down to seasonal factors and observed that the level is below the 10.5% recorded in February 2006.
Despite this, the group is expected to miss profit forecasts of £80m in 2008 and £90m in 2009. In response, the board has launched a review of its operations that will “result in increased focus on the specialist mortgage market in the UK and Ireland”.
Chief executive John Maltby has decided to step down and there are rumours that the company might be sold, with the group confirming that it has been in talks with “a limited number of parties”, but that no deal has been struck yet.