Virgin Money buys more loans from Northern Rock bad bank

Tim Wallace
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THE TAXPAYER-OWNED part of Northern Rock offloaded another half a billion pounds-worth of mortgage assets yesterday, accelerating the wind-down of the so-called bad bank.

Virgin Money, which bought the “good bank” at the start of this year, paid £465m for a book of roughly 3,700 residential mortgages, of which one-third are buy-to-let loans.

None of the loans are in arrears and the relatively low average loan to value ratio keeps the ratio for the bank’s mortgage book as a whole at 64 per cent.

UK Asset Resolution, which runs Northern Rock Asset Management, insists it worked hard to get the best deal for the taxpayer, hiring independent analysts to confirm they were getting a fair price for the mortgage book.

“The proceeds of the sale will be used directly to repay the NRAM government loan,” UKAR confirmed.

The deal represents roughly one per cent of NRAM’s total assets, and adds 3.3 per cent to Virgin Money’s existing £14bn loan book.