Bradford & Bingley pay off £5bn bailout at last

The taxpayer will finally get back its money from bailed-out Bradford & Bingley after the sale of £5.3 billion in mortgage loans on Thursday.

The lender was rescued by the Government a decade ago with a £15.7 billion loan via the Financial Services Compensation Scheme, and assets placed in the state’s “bad bank”, UK Asset Resolution.

UKAR’s latest sale of B&B loans, to a Barclays-led consortium of UK banks as well as bond giant Pimco, means that the outstanding taxpayer loan will be paid off in full when the deal completes.

UKAR’s chief executive, Ian Hares, said the deal marked a “significant moment in B&B’s history” and cut back UKAR’s assets to £14.5 billion, down from more than £100 billion immediately after the crisis. The sale of the 45,000 buy-to-let and residential loans does not affect the customers involved, and came at a £115 million premium to book value.

Alongside today’s deal, UKAR also has nearly £1 billion of equity release loans up for sale as it seeks to whittle down assets further. Hares said: “I would be surprised if it takes longer than five years.”