Capita wins £325m Co-Op Bank mortgage service outsourcing deal

11th Nov 2014 09:15

Capita has won a £325m 10-year mortgage servicing contract from The Co-operative Bank in a deal that will see it acquire the Co-op's Western Mortgage Services mortgage administration business.Co-op Bank, which has more than 250,000 mortgage customers and £23bn of lending, will, subject to approval by its board and the regulator, transfer control of its mortgage servicing operations to Capita, including around 660 people, technology systems and capabilities, predominantly based in Leek and Plymouth.The pair said the deal, which would be one of the largest in a decade if it is agreed, is designed to drive efficiency at the Co-op while simplifying its business processes in the increasingly tougher banking regulatory environment.Niall Booker, chief executive at The Co-operative Bank, said: "It is vital we improve our processes, consolidate and utilise up to date mortgage systems and, as a smaller bank, ensure we can respond nimbly in a competitive market, mindful of the impact of increased regulation to our cost base."These proposals to partner with Capita would support our plans for growth in retail mortgages and would enable us to continue to deliver high standards of service to our customers and brokers."Capita recently acquired the well established Crown Mortgage Management and has an existing commercial debt-servicing business and chief executive Andy Parker said the company would draw on its "heritage of large scale customer service transformation across a range of industries facing similar challenges".He added: "Retail banking is facing unprecedented business and regulatory challenges and Capita is therefore focusing strongly on developing capacity to support this market."Capita would work with The Co-operative Bank to deliver an enhanced service for customers, by, for example, using analytics and insight to give them the experience they want and expect from their mortgage provider."Capita's ambition is to draw on its business process and customer service transformation expertise to become the leading end-to-end mortgage processing partner delivering real value to financial services clients."The deal and acquisition, which The Co-operative Bank is briefing its employees on today, is subject to a final contract being signed, approval by the Bank's board and approval by the Financial Conduct Authority.