"It delivers value for money for the taxpayer and compares favourably with the ‘fair value’ of the B&B loan book disclosed in B&B’s accounts last year."
The government says the price achieved reflects "the strong credit quality of the portfolio and the outcome of a highly competitive sale process".
In a statement, the government said: "It delivers value for money for the taxpayer and compares favourably with the ‘fair value’ of the B&B loan book disclosed in B&B’s accounts last year. The fair value of the B&B loan book is less than its book value, reflecting the low interest rates payable on the loans."
UK Asset Resolution manages Bradford & Bingley and NRAM’s closed loan books on behalf of the taxpayer. Allowing for today’s transaction, UKAR’s balance sheet now stands at £22 billion, down from £37 billion in September 2016 and from £116 billion in 2010.
At Budget 2016, the government announced that it would explore a programme of sales designed to raise sufficient proceeds for Bradford & Bingley to repay the £15.65 billion debt to the FSCS and, in turn, the corresponding loan from the Treasury.
Today’s sale is the first in the programme. The programme of sales is expected to conclude in full before the end of 2017-18.
Chancellor Philip Hammond said: "The sale of these Bradford & Bingley assets for £11.8 billion marks another major milestone in our plan to get taxpayers’ money back following the financial crisis.
"We are determined to return the financial assets we own to the private sector and today’s sale is further proof of the confidence investors have in the UK economy."
