Interest is growing in UK Asset Resolution's mortgage book
UK Asset Resolution (UKAR), the “bad bank” formed out of Northern Rock and Bradford & Bingley, has received a number of offers from private equity groups and investors to buy part of its mortgage book.
Chief executive Richard Banks says that government-owned UKAR has received several approaches from investment firms and private equity groups since it sold a portfolio of mortgages to Virgin Money in July for £465 million.
He said: “We’ve received a number of speculative offers but with arrears falling, the mortgage book is looking better value than two years ago. But if the price is right, we’ll do a deal.”
Any money raised from a sale would go towards reducing the £43 billion that the bank currently owes the taxpayer. Since its formation in 2010, it has repaid £5.2 billion to the Treasury.
Banks believes that UKAR will repay the majority, if not all, of the money it owes the taxpayer within the next decade.
Underlying pre-tax profits for 2012 were flat at £1.1 billion. UKAR also said that the number of accounts in arrears by three months or more had fallen to five per cent, compared with the 2 per cent industry average.
However, Banks predicted that more of UKAR’s customers will have trouble repaying their mortgages, given the pressure on incomes. He added that anyone experiencing difficulties should contact the company.