UK lifeboat for Bradford & Bingley and Northern Rock loans pays back half of government lending

Oliver Gill
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Shareholders walk past Northern Rock ban
Northern Rock Asset Management was taken into public ownership in February 2007 (Source: Getty)

The UK’s “bad bank”, the lifeboat for Bradford & Bingley and Northern Rock’s loan books, has repaid the £23.7bn of government loans since it was formed in 2010.

UK Asset Resolution (Ukar) said today nearly half of the money pumped into the organisation by the taxpayer had now been repaid.

Underlying profit at the state-backed loan firm fell 33 per cent to £706m as its balance sheet shrank.

Last year Ukar said it would sell Bradford & Bingley’s (B&B) £15.7bn mortgage book in two or three tranches. In March it flogged the first slice to insurer Prudential and US buy-out firm Blackstone for £11.8bn.

And Ukar chief executive Ian Hares today revealed the firm plans to pay back a £4.8bn loan from the Financial Services Compensation Scheme by March 2018

Read more: Government sells B&B loans to Prudential and Blackstone for £11.8bn

On Friday, Sky News reported Blackstone was one of a number of parties circling the remainder of Ukar’s B&B mortgages. Other parties expected to make offers included OneSavings Bank, Och-Ziff and buy out firm TPG.

Hares said:

I am not in a position to confirm any names because the process has not been formally launched yet. But, there are a number of interested parties.

Blackstone bought the last one so it wouldn't be a surprise if they are in there again.

The Northern Rock branch network was sold to Virgin Money in 2011, leaving B&B’s servicing arm to look after the remaining Northern Rock Asset Management mortgages.

In June last year B&B started a seven-year to outsource its servicing operations to Computershare. This led to around 1,700 B&B employees being transferred to the outsourcing firm.

Hares said: "I am pleased with the progress made during the year. In the first half, we completed the transfer of our mortgage servicing operations to Computershare, ensuring continuity of service for customers.”

Read more: MPs worried taxpayers missed out in £13bn Northern Rock sale

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