UK ‘bad bank’ lures buyers for its soured loans

A £13bn (€18m) mortgage portfolio put up for sale by the bad bank charged with winding down the assets of two failed British lenders has lured interest from several possible bidders, the group’s boss said yesterday.

UK ‘bad bank’ lures buyers for its soured loans

UK Asset Resolution, which is selling off the loans of bailed-out Northern Rock and Bradford & Bingley, said in April it was selling the portfolio, named Granite, along with its mortgage servicing operations, aiming to speed up the repayment of taxpayers’ money.

“We have had indicative expressions of interest on both transactions from several parties,” UK Asset Resolution, chief executive Richard Banks said.

“We are now going through a period of evaluation.”

British chancellor George Osborne is keen to sell the UK government’s banking assets to recoup taxpayers’ money splashed out in a bailout of troubled lenders during the 2007-2009 financial crisis.

Under financial plans set out after the Conservatives were elected with a surprise majority in May, Osborne said last week that the government would begin selling shares in Royal Bank of Scotland in the coming months, having already sold more than half its stake in Lloyds Banking Group.

Other banking assets are owned by UK Asset Resolution. Reuters reported earlier in June that a group including investment bank Goldman Sachs and US buyout firm Blackstone had bid for Granite. RBS is also interested in the portfolio, sources said.

Banks said a shortlist of potential buyers would be in place by the end of July but warned that extended “due diligence” on both transactions would follow, making it unlikely either will complete in 2015.

UK Asset Resolution, Britain’s seventh-biggest provider of home loans, also said it had repaid £3.7bn to the government in the year through March 2015, bringing the total repaid to £14.1bn of the £48.7bn it owed.

Banks said he expected taxpayers to be fully repaid within 10 years. UK Asset Resolution, reduced the size of its balance sheet a further £8.8bn in the period.

That means assets worth £49.7bn have been shed since its formation from its £115.8bn balance sheet in 2010.

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