Both banks became subsidiaries of UK Asset Resolution (UKAR) after they were nationalised in 2008 during the financial crisis. Their return to private ownership will be subject to “achieving value for money” and market conditions “remaining supportive”, Treasury said.
HM Treasury has come under pressure from politicians and campaigners when selling off the UKAR mortgage books to only do so to active lenders.
It has been highly criticised for failing to protect borrowers and worsening the situation for these mortgage prisoners by selling their loans to inactive, unregulated or closed book lenders.
UKAR’s balance sheet has reduced from £115.8bn in 2010 to £8bn following the sale of Northern Rock mortgages and unsecured loans to inactive investment bank Citi in April last year.
In May 2019, the government transferred sponsorship of B&B’s and NRAM Ltd’s pension schemes to UKAR in preparation for the banks being returned to private ownership.
Subject to securing the necessary parliamentary time, the government intends to create a new central government pension scheme for the members of the schemes.
The government said members’ pensions will not be affected by this transfer and following the establishment of a central government pension scheme, it intends to sell assets held by the NRAM and B&B schemes over 2023-24 and 2024-25.
This will depend on necessary legislation being brought forward, supportive market conditions and achieving value for money.
The government expressed its intention to fully dispose of its Royal Bank of Scotland shareholding, which it has held since 2008 by 2025.
In 2018, the government sold shares at a loss of £2.1bn to the taxpayer, decreasing its stake from 70.1 per cent to 62.4 per cent. This further disposal will be subject to market conditions and achieving value for money for taxpayers, HM Treasury added again.