Hedge fund in £400m deal for Northern Rock’s bad assets

 
Tim Wallace
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NORTHERN Rock’s so-called bad bank has sold £400m of unsecured personal loans, government agency UK Asset Resolution (UKAR) announced yesterday.

The better performing loans are going to OneSavings Bank, a lender that is backed by US hedge fund JC Flowers.

And the lower quality loans are going to Marlin Financial Group.

The combined deals cover loans to 140,000 customers.

“The continued fair treatment of customers was a key consideration for UKAR in the choice of buyers,” the agency said in a statement.

It added the agency will contact the affected customers when the deal goes through in the next six months.

The deal is expected to generate a small profit for UKAR, which represents the taxpayers’ interests in winding down the remainder of banks including Northern Rock and Bradford and Bingley.

UKAR has been running down its book rapidly recently – a year ago it sold £460m of its mortgage loans to Virgin Money, the same institution which bought the good bank part of Northern Rock in a bid to break into high street banking.

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