The Government has agreed to sell its Bradley & Bingley loan book for £11.8bn to Prudential and to funds managed by US private equity firm Blackstone.
The portfolio of mortgages was acquired by taxpayers during the financial crisis.
The Government says the £11.8bn price reflects the “strong credit quality of the portfolio and the outcome of a highly competitive sale process”.
The Government bailed out B&B in 2008 at the height of the financial crisis, with its mortgage book, personal loan book, headquarters and wholesale liability coming into state ownership.
UK Asset Resolution manages B&B and Northern Rock Asset Management’s closed loan books on behalf of the taxpayer.
The Treasury statement says following today’s deal, UKAR’s balance sheet now stands at £22bn, down from £37bn in September 2016 and from £116bn in 2010.
Chancellor Philip Hammond says: “The sale of these B&B assets for £11.8bn 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.”
In last year’s Budget, the Government said it would look into a sales programme to raise enough money for B&B to repay the £15.65bn debt to the Financial Services Compensation Scheme and the loan from the Treasury. This sale is the first in the programme.
The programme of sales is expected to finish before the end of 2017/18.