Budget 2016: Treasury confirms plans to offload Bradford and Bingley loans as part of state-owned assets sell-off

William Turvill
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The government is looking to offload £16bn of Bradford and Bingley assets (Source: Getty)

George Osborne today confirmed plans to offload £16bn of Bradford and Bingley (B&B) loans.

The Treasury's Budget 2016 document also laid out plans to sell off several other state-owned assets, including Lloyds Banking Group shares and its Royal Bank of Scotland (RBS) holding.

The chancellor expects to raise £25bn from RBS by the end of 2019-20.

In addition, the Budget 2016 document confirmed plans to privatise the Land Registry, with the process of transferring the Green Investment Bank to the private sector under way.

Read more: Osborne to kick start £16bn B&B sell-off next week

In November last year the government offloaded £13bn of mortgages that were acquired from Northern Rock during the financial crisis, under mortgage securitisation vehicle Granite.

The Budget document said that following this, the Treasury, UK Financial Investments (UKFI) and UK Asset Resolution (UKAR) “have been exploring further sales of UKAR mortgages: in particular, a programme of sales designed to raise sufficient proceeds for Bradford & Bingley to repay the £15.65bn debt to the Financial Services Compensation Scheme (FSCS) and, in turn, the corresponding loan from the Treasury”.

This programme of sales is expected to be concluded by 2017/18.

Earlier this month, it emerged that Britain’s largest high street banks were planning to help the Treasury offload the B&B loans by guaranteeing around financing to the purchasers of the loans.

The Budget appeared to confirm this, saying that the Treasury, UKFI and UKAR have received “highly confident” letters from a consortium of Financial Services Compensation Scheme member banks. \

These letters set out “the in-principle terms on which they would expect to provide debt funding to support a major sales programme of B&B mortgages”.

Read more: Government to consult on Land Registry privatisation

The Budget document also said the government was “making progress towards achieving a further £5bn of corporate and financial asset sales by March 2020”.

It said: “The process to transfer the Green Investment Bank to private ownership has begun and the government will shortly consult on options to move the operations of the Land Registry to the private sector.

“In addition, the government is continuing to pursue the sale of the pre-2012 income contingent repayment student loan book, with a first sale in 2016-17.”

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