The UK government has sold off 115,000 Northern Rock mortgages it was forced to buy during the 2008 financial crisis to Cerberus, a US asset management firm.
The £13 billion ($US19 billion) deal is the largest financial privatisation in UK history, Chancellor of the Exchequer George Osborne said on Friday.
“Today marks another major milestone in clearing up the mess left by the financial crisis, with the sale of former Northern Rock mortgages,” Osborne said.
“The sale, which raises £13 billion for the British taxpayer, is the largest ever sale of financial assets by a British government, and we are now clear that taxpayers will get back more money from Northern Rock than they were forced to put in during the financial crisis,” he said.
Northern Rock was the first UK bank in 150 years to experience a bank run when it sought emergency funding from the Bank of England in 2007. The bank collapsed and the Treasury took over management of the bank’s mortgages.
The mortgage portfolio, known as Granite, fetched £300 million ($US500 million) more than its book value, suggesting Cerberus believes the value of the asset will increase.
Cerberus Chairman John Snow said the firm was “pleased that, after a lengthy and thorough process, UK Asset Resolution Limited selected Cerberus as the acquirer of this significant portfolio of mortgage loans.”
“Cerberus prides itself on having earned the trust of financial institutions and regulators across Europe, who recognise our expertise and significant experience in responsibly managing loan portfolios.”
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.