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£13bn sale of Northern Rock mortgages £13bn sale of Northern Rock mortgages
(35 minutes later)
The government has sold £13bn of former Northern Rock mortgages that taxpayers acquired during the financial crisis.The government has sold £13bn of former Northern Rock mortgages that taxpayers acquired during the financial crisis.
The portfolio is being sold by UK Asset Resolution (UKAR) to Cerberus and the sale is thought to be the largest financial asset sale by a European government. The portfolio is being sold by UK Asset Resolution (UKAR) to US investment firm Cerberus. The deal is thought to be the largest financial asset sale to date by a European government.
UKAR is selling the mortgages for £280m more than their book value . UKAR was the "bad bank" set up in 2010 to run down loans made by Northern Rock and Bradford & Bingley.
The government has now sold more than 85% of the assets of Northern Rock. The mortgages are being sold for £280m above their book value.
The lender collapsed in 2007 and marked the start of the financial crisis. The government has now sold more than 85% of the assets of Northern Rock, which collapsed in 2007 and marked the start of the financial crisis.
Chancellor George Osborne said: "We are now clear that taxpayers will get back more money from Northern Rock than they were forced to put in during the financial crisis. Chancellor George Osborne said: "We are now clear that taxpayers will get back more money from Northern Rock than they were forced to put in during the financial crisis."
"The highly competitive process, unprecedented scale, and the fact that these mortgages have been sold for almost £300m more than their book value demonstrates the confidence investors have in the UK, which has only been made possible by the success of our long-term plan." TSB deal
Mr Osborne added: "The highly competitive process, unprecedented scale, and the fact that these mortgages have been sold for almost £300m more than their book value demonstrates the confidence investors have in the UK."
Meanwhile, TSB Bank will buy £3.3bn of the former Northern Rock mortgages and loans from Cerberus.
That deal means it will become the mortgage lender to another 34,000 UK homeowners.
Customers with former Northern Rock mortgages or loans do not need to take any action and there will be no changes to terms and conditions.
BBC business editor Kamal Ahmed said it was very difficult to judge whether this was a good deal for taxpayers, because calculating the overall cost of the banking bailout was extremely complex.
"What people probably want to get to is a more normal situation with banks operating normally, serving their customers in the private sector. This at least is a step in that direction," he told the Today programme on Radio 4.