Kent Reliance to transfer assets to OneSavings

A proposed new bank combining the business of Kent Reliance building society and a £50m investment from JC Flowers, the US private equity group, is to be called OneSavings, the society said.

Voting papers on the society’s restructuring, first announced in the summer, will go out to its 180,000 savers and borrowers later this month, with the poll’s result to be announced on November 19 at a special meeting.

The tie-up is due to take effect from February 2011 and would give JC Flowers 40 per cent of the new bank, with Kent Reliance retaining majority ownership. The mutual would also convert into an industrial and provident society.

To proceed, the transaction requires approval from 75 per cent of the Kent Reliance savers who vote, which some in the industry believe could prove a hurdle given that no windfall payments are on offer to society members.

JC Flowers is hoping to merge other societies into the proposed bank and has indicated that it is prepared to invest hundreds of millions of pounds in the sector to help create what it has termed a “super mutual”.

The OneSavings brand would likely be used on products subsequent to a future merger with another society, but for now the existing business would continue to operate under the Kent Reliance branding, the society said.