All lending in the portfolio is secured on property, well diversified across the UK, and has a similar credit risk profile to Metro Bank’s current mor
All lending in the portfolio is secured on property, well diversified across the UK, and has a similar credit risk profile to Metro Bank’s current mortgage book.
The majority of the mortgage book (92%) is buy-to-let mortgages, with the remainder being residential. The portfolio has a weighted average seasoning of around 10 years with a weighted average loan-to-value of about 70%. It has a current expected pay rate of circa 1.6% principally linked to the Bank of England base rate.
The consideration of £596.7m represents the value at which the acquired mortgages will be taken on to the bank’s balance sheet and is being financed using cash from existing resources. The portfolio is being acquired at a discount to par.
Craig Donaldson, CEO, said: “Our lending and deposit growth has gone from strength to strength and the acquisition of this high-quality loan portfolio supports our high-growth, organic business model as we track ever closer to our 2020 guidance.
“In particular the acquisition increases the loan-to-deposit ratio to circa 78% (2020 guidance c.80%). The portfolio complements our existing mortgage book and demonstrates our willingness and ability, helped by our strong deposit growth, to take advantage of opportunities as they arise.”