- UKAR took control of the assets of failed lenders after the credit crunch
- It has so far shrunk the remaining assets by £96bn – 83%
- Completing its mission will be a landmark moment for the crisis recovery
The ‘bad bank’ set up by the Government in 2010 is aiming to sell all the assets it took control of after the financial crisis in the next three years.
UK Asset Resolution (UKAR), which is winding down the mortgage books of failed lenders Northern Rock and Bradford & Bingley, said on Tuesday it was ‘probable’ it could complete the sell-down by 2021.
Northern Rock, the former building society, was nationalised in February 2008
This would mark another milestone in the sector’s recovery since the credit crunch meltdown.
Last year, Lloyds Banking Group was fully returned to private hands and, less than a month ago, the Government restarted the process of selling down its stake in Royal Bank of Scotland.
UKAR has so far managed to shrink the remaining assets by 83 per cent or £96bn, and it cut the balance sheet by another £14.5bn to £17.2bn in the year to March 31.
It announced a further £5bn sell-off in April, as well as the sale of £900m equity release mortgages, so its customer balances are now likely to fall below the £11bn mark.
UKAR said: ‘As always, we will need to satisfy ourselves, UK Government Investments and HM Treasury that whatever option we choose represents value for money for the taxpayer but, subject to the continuation of supportive market conditions, we believe that it is probable that the process can be completed by 2021.’
Bradford & Bingley was nationalised in 2008. Its deposits and branch network was sold to Abbey National and rebranded to Santander in 2010
Chief executive Ian Hares added: ‘I am pleased that we have continued to make good progress in achieving our objective, with high levels of service delivered for our customers and an 83 per cent reduction in our balance sheet since formation in 2010.’
UKAR borrowed £48.7bn of taxpayer cash to take on the loans of Northern Rock and Bradford & Bingley, but has so far paid £38.4bn back to the Government – 79 per cent.