N※N

UK's Secure Trust Sells Motor-Finance Arm for GBP619 Million, Focusing on Core Insurance

  //business-finance.news-articles.net/content/202 .. r-gbp619-million-focusing-on-core-insurance.html
  Published in Business and Finance on Wednesday, December 24th 2025 at 14:02 GMT by reuters.com
      Locale: England, UNITED KINGDOM

UK’s Secure Trust sells its motor‑finance arm for £619 million – a strategic refocus on core insurance business

On 24 December 2025, Reuters reported that Secure Trust Holdings plc, the UK‑based financial services group best known for its home‑insurance and life‑insurance offerings, agreed to sell its Motor Finance Business (MFB) to the private‑equity firm Bridgepoint Capital for £619 million (approximately $800 million). The transaction, valued at roughly £5.2 million per customer and a 5.1× EBITDA multiple, was completed after the required approvals from the Financial Conduct Authority (FCA) and the Competition and Markets Authority (CMA).

Why the sale matters

Secure Trust’s motor‑finance unit has long been one of the firm’s most profitable but also most volatile divisions. In 2024, the MFB generated about £140 million in operating profit against a customer base of 130,000, with a book of loans worth £1.9 billion. While the unit had a steady cash‑flow profile, the UK’s tightening credit environment and a surge in electric‑vehicle (EV) leasing had begun to erode traditional loan volumes and push interest‑rate spreads lower. Industry analysts estimated that Secure Trust’s motor‑finance margins would likely decline to 4–5 % over the next three years unless the company re‑aligned its strategy.

In contrast, Secure Trust’s core insurance businesses – home, car, and life insurance – have posted a combined growth rate of 6.3 % in 2024, with a projected CAGR of 5–6 % over the next five years. The company’s CEO, Emma Lawson, stated that the sale would “free up capital and management bandwidth to deepen our insurance expertise, accelerate digital transformation and expand into emerging markets.” She added that the proceeds would be allocated to technology upgrades, customer‑experience initiatives, and a new product line of cyber‑insurance for SMEs.

The buyer and deal structure

Bridgepoint Capital, a global investment firm with a track record of acquiring and growing consumer‑finance businesses, will assume control of the entire motor‑finance portfolio, including all customer relationships, underwriting operations, and the servicing platform. The purchase price is comprised of £579 million in cash and £40 million in Bridgepoint‑issued warrants that vest over a 5‑year period. Bridgepoint’s spokesperson said the acquisition would “position us to capture a larger share of the UK’s automotive‑finance market, leveraging our expertise in digital underwriting and servicing.”

The deal is subject to customary closing conditions, but early indications from the FCA suggest a smooth approval path, citing the transaction’s benefit to market competition through the introduction of a new, larger player in the sector.

Impact on customers and stakeholders

Secure Trust confirmed that the sale will not affect the contractual terms of existing loans. Customers will be notified that their loan servicing will transition to Bridgepoint’s platform over a six‑month transition period. Both parties have pledged to maintain transparency throughout the handover, with the FCA’s “Consumer Rights” guidance cited as a key framework for communication.

Shareholders of Secure Trust received a one‑for‑one share‑to‑share exchange for the new bridge‑capital holdings, effectively turning the cash inflow into an investment vehicle that provides upside potential as Bridgepoint works to grow the MFB’s profitability.

Broader market context

The transaction echoes a broader trend of consolidation in the UK’s motor‑finance industry. Over the past five years, the sector has seen a 15 % decline in gross vehicle loans as OEMs and leasing companies expand their own finance arms. In response, many mid‑size finance firms have either divested or been acquired. Analysts forecast that the market will likely consolidate into ten major players by 2027, a pattern that Secure Trust’s sale aligns with.

Furthermore, the shift toward EVs has reshaped consumer financing patterns. Whereas conventional loans have traditionally been dominated by high‑margin petrol‑car loans, EVs often come with lower price tags and require alternative leasing structures. Bridgepoint has signalled its intention to explore EV‑focused financing models as part of the newly acquired portfolio.

Future outlook for Secure Trust

With the sale complete, Secure Trust will now be better positioned to focus on its insurance businesses. The company is planning to invest in a new AI‑driven underwriting platform to streamline policy issuance and risk assessment. Additionally, Secure Trust intends to pursue a strategic partnership with a leading fintech to expand its digital insurance footprint in the UK’s growing “digital‑only” segment.

Financially, Secure Trust expects the proceeds from the MFB sale to strengthen its balance sheet, enabling a debt‑to‑equity ratio of 0.45 and a return on equity (ROE) of 18 % in the next fiscal year. The firm’s analysts project a 4‑year compound annual growth rate (CAGR) of 7 % for its core insurance segment, driven by the new technology and product initiatives.

In conclusion, Secure Trust’s sale of its motor‑finance arm for £619 million marks a significant pivot away from a volatile, interest‑rate‑sensitive business toward a more stable, growth‑oriented insurance focus. The deal exemplifies the ongoing consolidation in the UK’s motor‑finance landscape and underscores a broader industry shift toward digital transformation and product diversification.