Virgin to buy £465m Northern Rock mortgage assets
Acquisition is “sensible deployment” of excess liquidity and will grow mortgage book with high-quality mortgages.
Virgin Money has agreed to acquire a portfolio of Northern Rock mortgage assets from UK Asset Resolution, the holding company for Northern Rock Asset Management and Bradford & Bingley, in a deal worth £465m.
According to the company, the transaction enables Virgin Money to deploy some of its “excess liquidity” to grow its mortgage book with “high-quality loans that complement the existing book structure”.
The acquisition will not significantly affect either the average loan-to-value ratio of the book, which currently stands at 64 per cent, or the three months plus arrears position of the Virgin Money mortgage book, which stands at 0.3 per cent.
The acquisition does not change Virgin Money’s organic growth plans or its stated target of providing £45bn of new lending between 2012 and 2017, the company confirmed.
Virgin Money will be contacting affected customers closer to the transfer date, which is expected to be before the end of the year. Until then, their loans will continue to be managed by NRAM.
Jayne-Anne Gadhia, chief executive of Virgin Money said: “I am delighted to be able to welcome this new group of customers to Virgin Money and we will be making every effort to make the transition simple and straightforward for them.
“This is an excellent acquisition for us. It is sensible deployment of some of our excess liquidity and allows us to grow our mortgage book with high quality mortgages.
“UKAR has confirmed that it intends to use the proceeds of the acquisition to further repay their government loan, in the best interests of taxpayers, and so this transaction offers a great example of our philosophy of making everyone better off.”