Britannic sells mortgage business

Troubled Midland insurer Britannic has sold its mortgage lending subsidiary to another local firm, casting a shadow over the future of 250 jobs.

Britannic, based in Wythall, north Worcestershire, is selling Epsom-based Britannic Money to the Paragon Group of Companies for £18.7m.

Paragon, based in Solihull, said it will seek substantial cost savings from the deal and there would "undoubtedly" be job losses among the 250-strong workforce.

Paragon Group chief executive Nigel Terrington said it was too early to say how many jobs would go.

New focus

But he said Paragon was looking to build Britannic's business and would try to keep job cuts to a minimum.

Mr Terrington added: "At the very least, this will end a period of uncertainty for Britannic Money's staff and give them a new focus for the future."

The FTSE 250-listed Paragon Group is the UK's largest independent specialist lender, offering residential investment mortgages and personal, retail and vehicle finance.

Paragon specialises in professional landlords who have been in the market for several years and have an average of 11 properties.

The firm said on Monday that the deal to buy Britannic Money would allow it to broaden its coverage into the middle market, where landlords have owned properties for shorter periods and own about five properties on average.

Britannic last week announced the departure of managing director Bryan Portman in the latest twist in the saga of the troubled group.

Earlier this year, it shocked the insurance sector by announcing it would freeze annual bonuses to policyholders and axe its dividend in a move designed to save the group £25m a year.