Virgin Money is to buy £465 million of NRAM mortgage assets from UK Asset Resolution (UKAR), the holding company for NRAM and B&B.
The transfer date is expected to be before the end of the year. Until then, the loans will continue to be managed by NRAM. There will be no changes to customers’ terms and conditions as a result of the transfer.
Virgin Money says the deal will enable it 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 LTV of the book, which currently stands at 64%, or the 3+month arrears position of the Virgin Money mortgage book, which stands at 0.31% (CML average 2.00%).
The acquisition does not change Virgin Money’s organic growth plans or its stated target of providing £45 billion of new lending between 2012 and 2017.
“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,” said Jayne-Anne Gadhia, chief executive of Virgin Money.
“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.”