Mortgage lender Bradford and Bingley yesterday sold its housing association loan book and portfolio of commercial property loans to Dexia, following a review of the assets .
The lender said the book was sold for cash proceeds, totalling £4.2 billion, which would allow it to improve its liquidity and invest in more profitable business such as its residential mortgage and retail savings business .
Dexia, Belgium's third-largest financial services company, received the loan book comprising of £2.2 billion of assets, which contributed around £26 million to Bradford and Bingley's profits in 2006.
Meanwhile the lender's commercial loans portfolio was sold to GE Real Estate for £2.2bn, representing a small discount to the book's value.
Bradford and Bingley confirmed that the sales were not related to the liquidity crunch but had been planned since April. The lender added it would retain around £800 million of commercial property assets following the release.
Steven Crawshaw, chief executive of the Bradford and Bingley group, said: 'These disposals are a natural step in the development of Bradford and Bingley's strategy."
"The £4.2bn proceeds will enable us to improve returns by redirecting capital and funding resources to take advantage of the significant opportunities that exist in the UK mortgage market today," he added.
The lender said the sales, which were described as "low-growth, low-margin", will result in a loss on disposal within the range of £15m to £40m.
Bradford And Bingley Sells Loan Books For 4.2 Billion Pounds
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Bradford And Bingley Sells Loan Books For 4.2 Billion Pounds
Wed, 21 Nov 2007
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