CVC drives into Aldermore auction as FirstRand exits under scandal cloud

CVC, which owns stakes in businesses such as the RAC and Six Nations Rugby, would be among a field of financial investors and banks weighing offers. Its interest is notable because private equity ownership of a deposit-taking bank is relatively rare and would require change-of-control approval from UK regulators. On the trade side, Lloyds Banking Group, Britain’s biggest high street lender, is also likely to bid, drawn by Aldermore’s small business and specialist lending.

Metro Bank, which had explored a move, is now unlikely to proceed, while challenger bank Shawbrook had been linked to the process earlier in the summer.

FirstRand put Aldermore on the block after the Financial Conduct Authority proposed a redress scheme for motor finance mis-selling that could cost the industry around £9bn ($12.2bn). The South African group, which has branded the scheme “disproportionate and unfair”, expects to be liable for about £750m ($1.02bn) in payouts, a figure that dwarfs the roughly £275m ($374m) its motor finance arm earned over the previous decade. The programme is also the subject of a legal challenge from several parties, including the finance arms of BMW and Volkswagen.

Having concluded that owning a UK consumer finance business no longer sat within its risk appetite, FirstRand opted to exit the market it entered in 2017, when it bought Aldermore for £1.1bn ($1.5bn).

Bankers advising FirstRand are expected to let bidders submit separate offers for Aldermore’s core banking operations and its motor finance arm, MotoNovo. That split is significant for a buyer like CVC, since it allows a bidder to pursue the cleaner specialist lending and savings business while ring-fencing exposure to the tainted vehicle finance unit. In addition, any acquirer is likely to demand an indemnity against future compensation liabilities, given the continued uncertainty over the timing and scope of the FCA’s scheme.

Founded in 2009 and based in Reading, Aldermore is a specialist bank serving small and medium-sized businesses and personal customers with lending, mortgages, and savings products, funded largely by retail and business deposits. It reported revenue of £600.4m ($817m) in 2025.