Britain's 'bad bank' has sold £13 billion of loans once held by former mortgage lender Northern Rock to US private equity firm Cerberus , marking the biggest ever sale of a book of loans in Europe.
Northern Rock, which was nationalised after nearly collapsing in 2007, came to symbolise the financial crisis in Britain and the sale of the 125,000 loans represents the latest stage of the British government’s push to sell assets to help to pay down the national debt.
“Today marks another major milestone in clearing up the mess left by the financial crisis,” finance minister George Osborne said.
The loans were sold for £280 million more than their book value, recouping money for taxpayers.
Mr Osborne is aiming to raise more than £30 billion over 2015-16 by selling off publicly owned assets, and he said proceeds have now reached over £24 billion since April 1.
In the past few months, the British government has sold more of its shares in Lloyds Banking Group and started to sell off part of its stake in Royal Bank of Scotland.
Cerberus will sell £3.3 billion of the loans, or a quarter, to TSB, the British bank that was bought this year by Spain’s Sabadell.
UKAR, a state-run 'zombie bank' that does not take on new business, said the sale brought its balance sheet reduction to £73.5 billion, or 63 per cent since formation in 2010.
Reuters
