“The highly competitive process, unprecedented scale and the fact that these mortgages have been sold for almost £300 million more than their book value demonstrate the confidence investors have in the UK, which has only been made possible by the success of our long-term plan.”
Richard Banks, chief executive of UKAR, said: “This deal does suggest that we can do better than our expectation of paying off the Government debt by 2025.”
He said there had been six bidders in the final round of the six-month sell-off period. While there were no more parcels of loans immediately up for sale, he added: “We are constantly on the look out for further asset sales.”
Asked if the success of today’s deal actually meant Northern Rock should not have been nationalised in the wake of the run on the bank in 2007, he said: “Conditions in 2015 are very different to conditions in 2007 and 2008. I don’t think at that stage Northern Rock was a sustainable business.”
The loans sold today are a mixture of performing and non-performing residential mortgages and unsecured loans, most of which comprised the Granite loan book that Northern Rock securitised before the financial crisis.
Since UKAR’s formation in 2010, its balance sheet has been shrunk by £73.5 billion, or 63% down to £42.3 billion.
Paul Pester, chief executive of TSB, said that the £3.3 billion book it has purchased was made up of “well-performing” loans with an average value of just under £100,000 and 16 years to run.
