Nationwide and Investec among bidders circling Aldermore sale

Nationwide and Investec are among the institutions set to submit first-round bids for Aldermore, the UK challenger bank being sold by its South African owner FirstRand, according to sources cited by City AM.

The two lenders are expected to lodge offers ahead of an initial deadline on Tuesday (15 September). FirstRand classified the entire Aldermore Group – which includes Aldermore Bank and MotoNovo Finance – as a discontinued operation and a disposal group held for sale, with non-binding offers expected by the end of September, to be followed by due diligence and binding offers by end of December.

Lloyds Banking Group and NatWest are also said to be among the potential bidders, per City AM's reporting, though both declined to comment. Nationwide and Aldermore also declined to comment, while an Investec spokesperson said the company did not comment on market speculation.

Why is FirstRand selling?

FirstRand moved to exit Aldermore after potential penalties of over R17 billion (£776 million) emerged from an investigation into unfair motor finance practices. The group said that while it considered Aldermore Bank a sustainable business with strong management, it did not believe the unit delivered the returns required under its disciplined financial resource allocation principles, particularly given legal and regulatory look-back risk tied to the motor finance scandal.

FirstRand has calculated that it will be liable for approximately £750 million in payouts under the Financial Conduct Authority's (FCA) proposed redress scheme, which is itself the subject of legal challenges from several companies including the finance arms of BMW and Volkswagen. The South African group originally acquired Aldermore in 2017 for £1.1 billion.

Analysts at RBC estimated Aldermore's current valuation at £1.45 billion, inclusive of its motor finance division, according to City AM.

Private equity also in the frame

The auction has also attracted significant private equity interest. CVC Capital Partners, which holds stakes in companies including the RAC and Six Nations Rugby, is expected to submit a bid, while Warburg Pincus is also said to be likely to lodge an offer. CVC and JC Flowers are also reported to be considering a joint bid, according to sources cited by Sky News.

Advisers to FirstRand – Bank of America and Rand Merchant Bank – are expected to give bidders the option of making separate offers for Aldermore's banking operations and MotoNovo, its motor finance arm. Any buyer would also likely seek an indemnity against future compensation liabilities tied to the mis-selling scandal.

A wave of mid-market consolidation

The sale sits within a broader pattern of consolidation across Britain's mid-market banking sector. Nationwide previously acquired Virgin Money for £2.9 billion in 2024, while Santander completed its acquisition of TSB in 2025.

Metro Bank had also been assessing a potential offer, though it is now understood to be unlikely to proceed, according to Sky News.