The 131,000 home loans consist of thousands of Northern Rock Together mortgages, which allowed customers to borrow up to 125% of the value of their home prior to the credit crunch.
At the time, the loans were funded by a complex financing vehicle named Granite which is part of UK Asset Revolution, the bank set up in 2010 to run Northern Rock and Bradford & Bingley following the impact of the financial crisis.
According to a report in the Sunday Times, UK Financial Investment, which looks after the state’s banking assets, has also expressed an interest in offloading other chunks of Northern Rock and Bradford & Bingley loans.
RBS is said to be up against American hedge fund Cerberus and Sabadell, the Spanish bank that owns TSB, in the battle to purchase the loan books.
In August the government started the sale of its shares in RBS, but came under fire for selling the shares below the 500p per share the government had originally paid.