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Blackstone on UK bank trail

City A.M. Reporter
AMERICAN investment group Blackstone is examining the possibility of entering the UK banking market, its chief executive Stephen Schwarzman said yesterday.

Last week sources familiar with the matter said that Blackstone, one of the world’s leading buyout firms, had applied for a British banking licence and was working alongside fund manager Cambridge Place on a venture called The Home and Savings Bank.

Schwarzman declined to comment on whether Blackstone had applied for a UK banking licence but when asked whether he was looking to enter the UK market, he said, “we are looking at one potential situation”.

Schwarzman said that opening a bank in the UK would not represent a major change in strategy for Blackstone. “We’re looking at buying financial assets in other places in the world,” he said on the sidelines of a conference in the Saudi capital.

Schwarzman pointed to Blackstone’s move last year with other private equity giants including the Carlyle Group and WL Ross & Co to take over failed Florida lender BankUnited.

A shake-up of the British banking sector – due in part to a forced sell-off of over 900 high street branches by bailed-out lenders and to government support for increased competition -- has attracted dozens of potential bidders and new entrants.

Blackstone is expected to put £200m into the new venture and the Pears family a further £50m, with Cambridge Place making a small investment, one of the sources said last week. Cambridge Place is speaking to other potential investors, which could include private equity and blue chip institutional investors, about investing in the planned bank.

FAST FACTS | Blackstone
The firm was founded by Schwarzman and Peter Peterson with $400,000 in 1985 .
Blackstone completed an IPO and listed on the New York Stock Exchange in 2007 with a total $7.6bn offering.