The book is being sold for cash proceeds representing the book value of the loans transferred, adjusted to reflect break-funding charges. In 2006, these assets contributed approximately £21m to Group profits.
Bradford & Bingley says selling these assets enables it to focus its activities on profitable growth in the core business of residential mortgage lending and retail savings. It adds the cash proceeds will further increase its liquidity and provide funding for attractive, higher margin opportunities in these markets.
Bradford & Bingley group chief executive Steven Crawshaw says: “The board concluded back in April that the sale of our housing association book was a natural step in the development of Bradford & Bingley’s strategy. It enables us to improve returns by redirecting our capital and funding resources to take advantage of the significant opportunities that exist in the UK mortgage market today.”