Virgin Money will be contacting affected customers closer to the transfer date, which is expected to be before the end of the year.
Virgin Money said affected customers will be offered the lender’s full range of products and services, including branch access at 75 stores around the country. There will also be no changes to customers’ terms and conditions as a result of the transfer.
Virgin said the transaction allows Virgin Money 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 change 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%, against a CML average of 2%.
The acquisition does not change Virgin Money’s organic growth plans or its stated target of providing £45bn of new lending between 2012 and 2017.
Jayne-Anne Gadhia, chief executive of Virgin Money, said: “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.
“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 its government loan, in the best interests of taxpayers, and so this transaction offers a great example of our philosophy of making everyone better off.”