Kent Reliance in talks with JC Flowers to raise £50m

ONE of the UK's oldest building societies is understood to be in talks over raising £50 million from a US private equity firm to fund expansion plans.

Kent Reliance Building Society (KRBS) has been in talks with JC Flowers - the investment firm that considered a bid for stricken Northern Rock in 2007 - for nine months, according to reports.

KRBS is the 12th largest building society in the UK - incorporating mutuals including the Kent & Canterbury, which was established in 1847.

The business is looking for funds to expand but profit margins are currently being squeezed in the mutual sector and the firm is unable to grow.

KRBS, which had assets of 2.26 billion in the year to September 2009, made profits of 2.26m through the worst of the financial crisis.

Following approval from its 180,000 members, the mutual would hold a majority stake in a joint venture with JC Flowers that could also serve as a vehicle to expand through acquisitions.

The business has only 45 staff in the UK, with 130 staff based in India.

KRBS declined to comment but is expected to confirm the discussions with JC Flowers today before giving further details on the arrangements later this week.