Legal & General-backed Salary Finance in advanced talks about merger

A prominent financial technology company part-owned by Legal & General (L&G) is in talks about a merger that would create one of Britain's biggest non-bank consumer lenders.

Sky News has learnt that Salary Finance, which advances employees' wages to them, and Oakbrook, a tech-enabled lending platform, are expected to be combined following talks between their largest shareholders.

Salary Finance is jointly owned by L&G and Blenheim Chalcot, a leading London-based digital ventures builder whose portfolio includes the fintechs Liberis and Modulr and which sold its remaining stake in Clearscore last year.

Sources said that Blenheim Chalcot and L&G had been discussing combining Salary Finance and Oakbrook for months.

A tie-up would create a company with a £500m loan-book and 200,000 active customers.

News of the talks comes weeks after Antonio Simoes, the new L&G chief executive, created a non-core unit of corporate investments, which are now earmarked for disposal.

They include Cala Group, the housebuilder.

L&G's stake is expected to be diluted by the deal, although it was unclear on Thursday whether it planned to divest its interest in the near term.

One source said the intention of the merger between Salary Finance and Oakbrook was to bring more transparent and accessible credit options to consumers who traditionally struggle to access affordable credit.

Salary Finance is said to have performed strongly this year.

The deal is expected to be finalised during the summer, according to insiders.

L&G and Blenheim Chalcot declined to comment.