News

Clifton Asset Management
26
Apr

Treasury sale of Bradford & Bingley for £5.3bn

Philip Hammond, Chancellor of the Exchequer, has authorised the £5.3bn sale of Bradford & Bingley mortgages, according to the treasury in an announcement today.
Following a ‘highly’ competitive auction, the paired portfolio of mortgages will we sold to an investor group mainly led by Barclays Bank, the treasury has revealed.
The proceeds from the sale will be used to repay the outstanding £4bn of a £20bn loan that was given by HM Treasury to the Financial Services Compensation Scheme in 2008.
The repayment of these loans will end the need for a special levy on deposit-taking banks.
Mr Hammond said: “We are determined to recover the money the taxpayer invested during the financial crisis as soon as we can. The sale of these Bradford & Bingley loans is yet another significant step in putting the crisis behind us.
“The proceeds of this sale will go towards reducing our national debt and securing a brighter future for the next generation.”
The books of Bradford & Bingley are managed by UK Asset Revolution (UKAR) on behalf of the taxpayer.
Following today’s transaction, UKAR now holds around £14bn worth of assets, down from £21bn in September 2017, and from £116bn in 2010.
Last year, the Treasury agreed to sell £11.8bn of Bradford & Bingley loans it had acquired during the financial crisis to Prudential and to funds managed by Blackstone.
Moreover in November 2015 the government sold £13bn worth of Northern Rock mortgages, again – acquired during the financial crisis, to US private equity firm Cerberus Capital Management. Following the subprime mortgage crisis in 2008 Bradford & Bingley was split up and nationalised, with its deposits and branch network sold to the Santander Group.