B&B’s £17bn loan book on the block

THE Treasury is putting out feelers to sell the £17bn loan book of former mortgage lender Bradford & Bingley, in what would be the biggest ever sale of financial assets by a European government.

Advisers are being appointed to examine disposing the loan package, and a document has been distributed to investment banks to float the idea.

UK Financial Investments is expected to oversee the appointment of an adviser to work on a potential transaction. If it goes ahead it will trump the sale of thousands of Northern Rock mortgages to US investment firm Cerberus for £13bn in November.

Bradford & Bingley was bailed out by the Government in 2008, with Santander buying its branches and deposits.

The building society’s other assets and liabilities were lumped together in UK Asset Resolution (UKAR), the so-called ‘bad bank’ set up by the Government to manage the assets of all the financial institutions nationalised during the crisis.

When it was first created, UKAR’s assets stood at £110bn, but this will have been halved by the time the Cerberus deal goes through. That sale has been called into question by MPs due to Cerberus being a US investor, and over concerns that customers should be adequately protected. The Treasury declined to comment on the potential sale.