Aldermore’s owner is set to make a decision over whether to split up the group after attracting bids that excluded its motor finance division, can reveal.

South African lender Firstrand put Aldermore on the sales block in April this year and received initial interest from around a dozen suitors, sources said. 

The process has been narrowed down to its last few bidders, who are seeking to buy either parts or the entirety of the bank. The companies still in the running include Lloyds, Investec and a joint-bid from private equity firms Warburg and Cerberus.

Investec, which is dual-headquartered in the UK and South Africa, is one of the front runners circling the banking unit but is keen to avoid Motonovo, the group’s loss-making motor finance lender.

Analysts at RBC expected the wider Aldermore group to fetch a price tag of between £1.1bn and £1.6bn.

Aldermore suitors shun motor finance arm

revealed in September Britain’s biggest building society Nationwide was set to make an offer. Metro Bank weighed up a £2bn merger with Aldermore and private equity giant CVC also prepared a bid, according to Sky News.

But the sale process is understood to have involved some friction over the motor finance unit.

Motonovo recognised a £153.2m charge in its latest accounts for historical motor finance commissions. This was more than double the £60.6m recorded the prior year.

Pressures from the increased provision for a regulatory redress scheme drove the firm to a loss of £151.6m for the financial year ending June 2026. This was more than six-times higher than the £24.6m loss recorded in the previous year.

Firstrand confirmed it was selling Aldermore after voicing frustration at the Financial Conduct Authority’s car finance compensation scheme. 

The £9.1bn scheme followed years of legal drama in the sector that led to a battle at the Supreme Court.

The top Court partially overturned a landmark ruling on car finance deals, rejecting claims that hidden commissions were automatically unlawful. But it found one customer’s undisclosed commission created an “unfair relationship”, leaving the door open for an industry-wide payout.

revealed last month Aldermore was also weighing a round of layoffs as it consults on plans to scale back on its invoice finance business. 

Lloyds, Aldermore, Warburg and Investec declined to comment.