Clean break

Taxpayer is finally free of Government’s stake in Northern Rock and Bradford & Bingley

THE Government has sold the remainder of Bradford & Bingley and Northern Rock, shedding the failed lenders from public ownership 13 years after they were nationalised.

The share capital and loan portfolios of both companies have been sold to a consortium of US buyers for £5bn following a bidding process. Their loan books will be snapped up by Wall Street giant Citi, while the companies themselves will go to Davidson Kempner, a New York-based hedge fund.

The Treasury said clients of B&B and Northern Rock – now NRAM – did not need to take any action, saying wouldbe buyers agreed to a “robust package” of customer protections. John Glen, economic secretary to the Treasury, said the sale was a “major achievement”.

Both banks were nationalised after collapsing during the financial crisis, with their retail operations and

‘The Treasury said that would-be buyers agreed to a “robust package” of customer protections’

branches split from their mortgage, investment and loan arms.

Bradford & Bingley’s retail operations network was sold to Abbey National, and rebranded to Santander in 2010. Northern Rock’s branches were acquired by Virgin Group in 2012, and rebranded to Virgin Money that year.

Since 2010, both companies’ mortgage and investment wings have been controlled by UK Asset Resolution, a “bad bank” that has acted as a holding company for their closed mortgage books. At the time, they had a mortgage balance sheet of £116bn, which UKAR has been gradually selling back to the private sector.

Ian Hares, chief executive of UKAR, hailed “the end of the Government’s ownership of these companies”.

Separately, Sky News reported that the Government was poised to push back the planned date for returning Natwest to private ownership.