Monday, February 20, 2012

News: Norton sells division as others go into administration


Midlands doorstep lender and motor finance company, S&U plc has acquired the home credit business from Rotherham-based Norton Finance.

Based on Mansfield Road in the town centre, Norton Finance operates as a group of companies including a profitable lending arm and divisions specialising in loans and mortgages and debt management. They employ over 200 people.

S&U plc acquired the home credit business for an undisclosed sum but said that the acquired business had gross assets at date of acquisition of approximately £0.75m and consideration will be paid in cash.

The statement added: "This acquisition will add to our customer base in the Yorkshire area and will be immediately earnings enhancing."

Earlier this month Norton Finance (UK) and Norton Insurance Services Limited entered administration. They provided a loan and brokerage service and also advised and sold Payment Protection Insurance (PPI).

A statement by administrators, Duff & Phelps, said: "The companies are subsidiaries of the much larger Norton Finance Group, which is unaffected by the situation."

The decision by the British Bankers' Association not to appeal the judicial review over PPI polices in May 2011 will potentially lead to many more claims for miss-selling.

The administrators added that Norton Finance (UK) was loss-making due to high costs of defending the increasing volume of claims and that the parent company has withdrawn financial support with the increasing number of claims making the business unsustainable. Balances between the companies was in excess of £1m, stemming form the funding of losses.

Norton Insurance Services Limited was trading profitably but its relationship with Norton Finance (UK) and its own sales of PPI has led to administration.

A pre-pack deal saw another group company, Norton Finance and Mortgage Limited buy assets from the companies in administration for £10,000.

Norton Finance said in a statement it was with reluctance that Norton Finance (UK) had closed, but added:

"However I am pleased to announce that Norton Finance and Mortgages has acquired the business and all employee positions will be protected.

"We look forward to continuing to work with all existing introducers and partners."

Norton Finance website


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