British lender Metro Bank has purchased a mortgage portfolio from a company owned by American private equity firm Cerberus Capital Management in a £596.7m deal.
The portfolio, acquired from Cerberus European Residential Holdings, includes 92% buy-to-let mortgages while the remaining is owner-occupied. The deal was funded in cash from existing resources.
Metro said that the acquired portfolio is secured on property and has a credit risk profile similar to its existing mortgage book.
Metro Bank CEO Craig Donaldson said: “Our lending and deposit growth has gone from strength to strength and the acquisition of this high-quality loan Portfolio supports our high-growth, organic business model as we track ever closer to our 2020 guidance.”
The deal will boost the bank’s loan to deposit ratio to 78%, as against the 2020 guidance of 80%, Donaldson said.