Government recoups total cost of Northern Rock loans

9 Apr 19

The UK government has recouped the full amount lent to Northern Rock and Bradford & Bingley with the sale of £4.9bn worth of loans. 

UK Asset Resolution, set up by the government in 2010 to close the mortgage books of Northern Rock and Bradford and Bingley’s books following the economic crash, has now reduced its assets to £8bn.

This compares to the to £116bn the holding company, which managed the former lenders’ books on behalf of the UK taxpayer, had originally. 

A Treasury, spokesperson told PF that while UKAR still has £8bn in assets, what the Treasury has sold to date has covered the initial cost of the loans.

The department,  announcing the sale last week, said the move marks a “milestone in the plan to recover taxpayers’ money and pay off the country’s debt”.

Chancellor Philip Hammond said: “Through our careful oversight of the country’s finances we are continuing to recover significant amounts of money that were loaned during the financial crash.

“[This] sale enable us to recover the full amount taxpayers loaned to Northern Rock and Bradford & Bingley, helping us pay down our debts and strengthen our finances for the future.”

The portfolio of mortgages and unsecured loans from NRAM – formerly part of Northern Rock -  was bought by investment bank Citi and bond manager Pimco.

The Treasury said: “This sale simplifies the book of assets held by UKAR, the holding company for NRAM and B&B, bringing the government closer to the final disposal of NRAM and B&B, as announced at the Autumn Budget 2018.”

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