The mortgages are being sold by UKAR to Cerberus, and TSB has confirmed that it has entered into a definitive agreement to acquire £3.3 billion of the mortgages and loans.
UKAR is selling the portfolio for £280 million more than their book value, and the government has now exited over 85% of the assets of the former bank.
Chancellor of the Exchequer, George Osborne, said:
"Today marks another major milestone in clearing up the mess left by the financial crisis, with the sale of former Northern Rock mortgages.
"The sale, which raises £13 billion for the British taxpayer, is the largest ever sale of financial assets by a British government, and we are now clear that taxpayers will get back more money from Northern Rock than they were forced to put in during the financial crisis.
"The highly competitive process, unprecedented scale, and the fact that these mortgages have been sold for almost £300 million more than their book value demonstrates the confidence investors have in the UK, which has only been made possible by the success of our long term plan."
Paul Pester, TSB Chief Executive Officer, added:
“We’re delighted to become the lender to 34,000 new customers across the UK and provide a secure, long-term home for these mortgages. Supporting hardworking people and helping local communities right across Britain to thrive is absolutely at the heart of what TSB was set up to do.
“With one of the highest capital ratios in the industry, TSB is well placed to support the loans. In addition, they will significantly enhance TSB’s profitability which, in turn, will help us to continue to deliver our growth strategy – helping us to bring more competition to UK banking.”
