The Treasury will sell off its book of Bradford & Bingley mortgages in the next few weeks, it has been confirmed.
The Government is close to completing the sale of the mortgage book, which will bring the taxpayer closer to recouping all the money spent on bailouts during the financial crisis of 2007/08.
The proceeds from the sale will be used to repay the outstanding £4 billion of a £20 billion loan that was given by HM Treasury to the Financial Services Compensation Scheme in 2008.
This was confirmed by Mark Neale, chief executive of the Financial Services Compensation Scheme in an interview with the Express.
He said: "When the sale of Bradford & Bingley is completed in a few weeks’ time we’ll have repaid the residual £4bn of that £20bn Treasury loan."
The FSCS needed the loan as it did not have the money to compensate all the people that had lost their savings when Bradford & Bingley was nationalised and Icelandic banks Kaupthing, Landsbanki and others failed.
Mr Neale added that the FSCS expected to receive thousands of compensation claims this year from people that suffered losses after being "badly advised" to transfer money out of their defined benefit (DB) pension funds and put it into high risk investments.
Last year the Treasury agreed to sell £11.8bn of Bradford & Bingley loans it acquired during the financial crisis to Prudential and to funds managed by Blackstone.
In November 2015 the government sold £13bn sale of Northern Rock mortgages acquired during the financial crisis to US private equity firm Cerberus Capital Management.
Following the subprime mortgage crisis in 2008 Bradford & Bingley was nationalised and split up, with its deposits and branch network sold to the Santander Group.
aamina.zafar@ft.com
