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Metro Bank sells £3bn mortgage portfolio to NatWest

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  • 23/12/2020
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Metro Bank sells £3bn mortgage portfolio to NatWest
Metro Bank has confirmed it will sell part of its residential mortgage book to NatWest for £3.1bn as it looks to expand its unsecured lending arm.

 

The value of the book is £3.045bn and accounts for around a third of the bank’s residential mortgage book.

The 13,000 mortgages to be transferred to NatWest are owner occupier which are largely on a repayment basis at 60 per cent loan to value.

They have an average interest rate of 2.08 per cent and borrowers have around two and half years remaining on a fixed term deal.

Metro Bank will make an estimated £83m from the sale of the book, giving the firm extra lending capacity to concentrate on higher yielding products such as specialist mortgages and unsecured loans.

Metro Bank chief executive Daniel Frumkin said: “The sale of part of our residential mortgage portfolio will provide us with further lending capacity and enable us to shift our asset mix and expand our unsecured lending portfolio, following our entry into the market with the acquisition of RateSetter earlier this year.”

Metro Bank bought RateSetter, a peer-to-peer platform, in August. Unsecured personal loan leads that come from RateSetter’s platform will be funded by Metro Bank’s deposit base, but RateSetter remains the lender.

RateSetter continues to manage its existing loan portfolio, funded by peer-to-peer investment, originated before the acquisition, but new lending will no longer use P2P finance.

Shawbrook Bank bought RateSetter’s property development finance portfolio in December. Metro Bank said this was not a “key area of focus”, for the bank.

The mortgage book will be transferred to NatWest over the next 12 to 18 months and borrowers affected by the switch will be written to informing them of their new lender.

Metro Bank said it remains open for business for new mortgage applications.

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