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US private equity firm Blackstone and FTSE 100 insurance group Prudential have succeeded in the battle to acquire the UK Treasury’s £11.8bn portfolio of former Bradford & Bingley mortgages, the government has confirmed, in what will be one of the largest government asset sales in Europe.

The Treasury said the £11.8bn pricetag “reflects the strong credit quality of the portfolio and the outcome of a highly competitive sale process”. Competition for the loanbook was strong, with more than 50 parties expressing an interest in the asset sale, according to bankers involved in the process.

The sale is the first in a series planned by the government intended to repay £15.65bn of debt to the Financial Services Compensation Scheme. The full programme of sales is expected to complete by the end of the 2017-18 financial year.

Philip Hammond, the chancellor, described it as a “major milestone in our plan to get taxpayers’ money back following the financial crisis”.

He said:

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.

After the sale, UK Asset Resolution will have reduced its balance sheet by more than 80 per cent since 2010, when it was established to manage the assets of the nationalised Bradford & Bingley and Northern Rock banks.

Copyright The Financial Times Limited 2017. All rights reserved.
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