‘Bad banks’ repay another £4 billion as bidders circle Northern Rock mortgage bookComments Off on ‘Bad banks’ repay another £4 billion as bidders circle Northern Rock mortgage book
There is still a further £34.6 billion of Government loans to go before the Chancellor of the Exchequer, George Osborne, will start to see any profit on this particular part of the financial crisis bank bailouts.
But UKAR chief executive Richard Banks is confident that the speed of the loan repayments will quicken after it put a massive £13 billion book of Northern Rock mortgages and its mortgage servicing business up for sale in April.
He said there had been strong interest shown for both assets but declined to confirm that Royal Bank of Scotland is among the bidders for the mortgage book in what would be its first acquisition since its own £45 billion bailout.
Banks said: “We have completed the first stage of the sales processes with indicative offers and are pleased with the level of interest in both assets. The second stage, which will see a smaller number of bidders putting forward much more detailed proposals, will start towards the end of July.”
That would indicate a final deal early next year rather than before the end of this year, he added.
Banks is still confident that once UKAR is completely wound up — and some of its mortgages run until 2049 — “there will be a surplus for the taxpayer”. But he is not sticking his neck out by saying just how big that surplus might be.
In the meantime, the improving housing market has made life easier for its 389,000 customers. That figure is down from 467,000 last year as more and more people paid off or transferred mortgages which have run their term.
The size of the balance sheet has likewise shrunk by another £8.8 billion last year with total loans and mortgages now standing at £52.7 billion. That is a £49.7 billion, or 43%, reduction since 2010.