The Treasury is to recoup almost £12bn from the sale of Bradford & Bingley loans, acquired by the taxpayer to help the lender at the height of the financial crisis.

It was announced that Prudential and funds managed by Blackstone were purchasing the portfolio - with the price reflecting its "strong credit quality", the statement said.

It marks the first step in the Government's effort to complete a programme of sales that will allow B&B to repay its £15.65bn debt to the Financial Services Compensation Scheme (FSCS) and corresponding loan from the Treasury.

Its mortgage book and investment portfolios were transferred to Government control when B&B was effectively nationalised in 2008, alongside Northern Rock, as banks ran into financial trouble.

Image: The Chancellor says the sale represents good value for the taxpayer

B&B's bank's deposits and branch network were bought by Abbey National - and are now under the Santander brand.


Friday's announcement coincides with Government efforts to fully return its stake in Lloyds Banking Group to private hands by this summer following its bailout.

The weight of legacy issues at Royal Bank of Scotland has proved to be a brake on its share sale process. It remains over 70% taxpayer owned.

The Chancellor, Philip Hammond, said: "The sale of these Bradford & Bingley 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."

The Treasury said it aimed to have completed its programme of B&B loan sales by the end of the 2017/18 tax year but it would only proceed if value for money was assured.

It did say the fair value of the B&B loan book was less than its book value, "reflecting the low interest rates payable on the loans."

UK Asset Resolution, known as UKAR, manages Bradford & Bingley's closed loan books on the Treasury's behalf.

Its chief executive, Ian Hares, added: "This sale of assets is a significant milestone in the phased repayment of the FSCS loan extended to Bradford & Bingley and when complete will reduce UKAR's balance sheet to £22bn from

£116bn in 2010 when it was formed."