UKAR shortlists buyers for £5.5bn taxpayer-owned mortgage loans

Alys Key
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The Chancellor Of The Exchequer Leaves Downing Street To Present The 2017 Budget To Parliament
A Treasury loan will be repaid with the proceeds (Source: Getty)

Mortgage loans worth £5.5bn taken on by the UK taxpayer during the financial crisis are closer to being bought as a shortlist of fund managers closes in.

Potential buyers include Pacific Management (Pimco), investment firm Cerberus Capital Management, hedge fund Och-Ziff, and M&G Prudential, according to Sky News.

The list of bidders is understood to have been drawn up by bankers advising UK Asset Resolution (UKAR), with the ambition of securing a top price.

Last year the government sold Bradford & Bingley loans to Prudential and Blackstone for £11.8bn. Cerberus has also bought a £13bn block of mortgages in 2015.

Now UKAR is approaching the sale of another tranche of loans which are a hangover from the financial crash. Chancellor Philip Hammond has also said that the government's crisis-era shares in Royal Bank of Scotland (RBS) will be sold in over a year.

Proceeds from the sale are likely to be put towards paying back the outstanding £4.7bn on a Treasury loan to the Financial Services Compensation Scheme (FSCS), which appointed a new chairman today.

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