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June 27, 2018

UK ‘bad bank’ plans to sell all assets by 2021

UK Asset Resolution (UKAR), commonly referred as ‘bad bank’, aims to sell all remaining loans and assets by 2021, subject to ‘supportive market conditions’.

UKAR, which incorporates Bradford & Bingley and NRAM, was constituted in 2010 to manage around £115.8bn of assets from these two lenders which collapsed during the financial crisis of the last decade.

It is responsible to dispose these investments in NRAM and B&B in an orderly way.

In its annual results, UKAR stated that currently balance sheet has reduced by £96bn, including £41.9bn of customer loan repayments and £27.2bn of asset sales, since 2010.

UKAR chief executive Ian Hares said: “I am pleased that we have continued to make good progress in achieving our objective, with high levels of service delivered for our customers and an 83% reduction in our balance sheet since formation in 2010.

“Following the financial year end, we agreed the sale of B&B assets which resulted in the repayment of the remaining FSCS loan to B&B and reduced our Balance Sheet by a further £5.0bn.”

In April this year, the company divested the Bradford & Bingley mortgage assets to an investor group led by Barclays Bank.

The transaction was settled in May reducing the balance sheet by an additional £5bn.

The forming of UKAR was part of the UK government’s initiative to stabilise the banking sector of the country during the economic slowdown.

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