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Metro Bank revisits mortgage portfolio sale – report

Shekina Tuahene
Written By:
Posted:
July 8, 2024
Updated:
July 8, 2024

Metro Bank has returned to plans to sell off some of its residential mortgage portfolio after shelving the idea last year, it has been reported.

Reported in Sky News, the lender is said to be working with Morgan Stanley on the process of raising money for the disposal of its mortgage portfolio. When the bank first tabled the idea last year, it priced its mortgage portfolio at £3m, but it has been reported that the value could be closer to £4m. 

Metro Bank confirmed it was looking to dispose of loans to improve its profitability and reduce its risk-weighted assets as it sought a £925m rescue package. 

The rescue deal was approved by shareholders in November, comprising a £325m capital raise and £600m of debt refinancing. 

It then dropped plans to sell off its mortgage portfolio in December, citing market conditions. 

Santander, Barclays, Lloyds Banking Group and Natwest were among the firms that expressed interest in the portfolio, it was reported. 

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Metro Bank closed the 2023 financial year with a statutory pre-tax profit of £30.5m, the first time the lender reported a profit since 2018. Its mortgage lending rose by 2% to £7.8bn. 

In the first quarter of this year, Metro Bank completed £11.8bn in mortgage lending, which was down on the previous quarter and lower than the same period a year earlier. 

The bank attributed this to a focus “towards higher-yielding specialist mortgages and SME/commercial lending”.