UK Asset Resolution (UKAR), the group tasked with winding down the closed mortgage books of Bradford & Bingley and NRAM, reported a drop of £8.8bn in the government’s balance sheet in the 2014/2015 financial year. This figure brings the total reductions to £49.7bn, down almost 43% since the group was formed in 2010 following the financial crisis.
Government loan repayments totalled £3.7bn in the year to 31 March 2015, bringing total repayments to £14.1bn since UKAR was formed, with almost 30% of the government loans now repaid.
Last week, Chancellor George Osborne announced in his annual Mansion House speech that he planned to begin selling the government’s 80% stake in the Royal Bank of Scotland at a loss, explaining that if the government waited any longer the whole economy would be forced to pay.
In April 2015, UKAR began the process of seeking expressions of interest in the sale of £13bn worth of mortgage assets and the sale or outsourcing of its mortgage servicing operations.
The group said the transactions were conditional on achieving value for money for the taxpayer and would help to accelerate repayment of government loans. UKAR said it had decided to begin the sales transaction process following recent asset sales success and interest from investors.
Richard Banks, UKAR chief executive, said: “Over the past four and half years we have achieved excellent results, reducing the balance sheet by nearly £50bn and overseeing a 70% fall in the number of mortgage accounts three or more months in arrears. To build on our success we are now progressing two ambitious divestment projects which, if successful, will accelerate repayment of the government loans and ensure the stability of service to customers.”