Premium finance provider plans new acquisition after snapping up Amber Credit.
Close Premium Finance is looking to buy Kaupthing, Singer & Friedlander’s premium finance arm after its acquisition of Amber Credit this week.
Market sources said that Close had expressed an interest in acquiring the UK premium finance division of Icelandic-based Kaupthing Bank, but that discussions had yet to progress.
Kaupthing, Singer & Friedlander’s asset finance and commodity trade finance divisions, which includes premium finance, were put up for sale last month. The premium finance arm is the UK’s third largest provider in the sector. A spokesman for Kaupthing said the bank was keen to conclude a sale within months.
The news emerged as Close announced that it had acquired Amber Select, the premium finance company known as Amber Credit, from Skipton Building Society for £2m.
Bob Golden, chief executive of Close Premium Finance declined to comment on possible interest in Kaupthing, Singer & Friedlander. But he indicated that Close was keen to make further buys. “We hope this [Amber Select] will not be the last premium finance acquisition we make this year,” he said.
The future of Amber’s 75 staff and directors remains unclear. Golden said its four directors, including managing director Rob Fry, were on gardening leave pending a review of their positions. It was too early to say whether there would be any redundancies among the Amber workforce, he added.
Amber has around 350,000 mostly personal lines clients. Close, the second largest premium finance provider, has around 600,000 clients and finances £1.75bn in annual premiums through 2,500 brokers.
Golden said: “The deal brings to Close an excellent quality broker base. We look forward to working with the brokers to enhance their profitability and efficiency and to bring value to their client base. Close is able to offer Amber Credit brokers certainty of funding during a difficult period in the markets and access to systems, products and services unsurpassed in the industry.”
Golden added that the credit crunch was likely to increase demand for premium finance products: “The credit crunch has yet to hit the real economy, but will do so in the next six months. When lending becomes tight so brokers’ clients will look for other sources of cash flow, so we expect the demand for premium finance to increase,” he said.