Newcastle Building Society is to purchase £360m worth of mortgage business from the UK branch of AMP Bank.
The move is part of a deal that will also see the building society pick up around £12m of policy loans ‘ those that have been secured on endowment policies ‘ and about £65m worth of savings accounts.
This is the biggest mortgage book acquisition Newcastle has made, and Robert Hollinshead, chief executive of the building society, said: ‘In one move we have achieved the equivalent of around 18 months of mortgage lending growth to the Society’s balance sheet. The quality of the AMP mortgage book is also extremely high. It is all prime residential lending and the average loan to value is around 50%. The geographical spread of the lending is also wide, adding to the low-risk nature of the deal.’ He added: ‘The transfer also provides us with 25,000 new borrowers who we can offer complementary products to. Our experience and expertise in the provision of mortgages, policy loans and deposit accounts is also good news for these borrowers. In short, the benefits are many and the risks are few.’
Conditional contracts have been exchanged and the transfer is expected to complete within three months.
AMP Bank announced a restructure of its operations in November 2002. The transfer of its UK banking portfolio is the second major step in the restructure, following the sale of the Australian and New Zealand credit card portfolio to American Express, announced in December last year.