Newly-crafted TSB is reportedly considering acquiring £1.5bn worth mortgage portfolio from the UK’s bad bank UK Asset Resolution (UKAR) as part of its strategy to swiftly grow its loan book.
UKAR, a taxpayer-owned intuition that manages the toxic loans of nationalized Northern Rock and Bradford & Bingley, is selling the mortgages to repay £50bn to the UK government, as reported by Sky News.
TSB, which was recently floated on the London Stock Exchange spinning out of Lloyds Banking Group, has expressed strong interest to buy more mortgages to boost profits.
At present, TSB owns £3.4bn of mortgages on loan from Lloyds and with the help of its widespread 620 branches; the bank aims to boost its mortgage footprint.
UKAR is offloading its £70bn loan book, encompassing approximately 529,000 mortgages and 119,000 unsecured personal loans, and giving its profits back to the UK Treasury, which pumped £48.7bn to save Northern Rock and Bradford & Bingley during the financial crisis of 2008.
A statement by UKAR was cited by Sky News as saying: "The completion of any sale will not affect the terms and conditions of the mortgages sold, and the continued fair treatment of customers will be a key consideration for UKAR in assessing the merits of a sale."
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By GlobalData"The proposed sale is in line with UKAR’s strategy and is part of the orderly wind-down of the closed mortgage books of both B&B and NRAM."