As part of NatWest’s H1 2024 results, the lender said that on completion of the £2.4bn transaction with Metro Bank (trade at a discount to book), it expects to welcome around 10,000 customer accounts.
It noted that these would continue to be serviced by Metro Bank following the transfer to NatWest Group.
As such, there will not be any change to borrowers’ contracts or terms, NatWest confirmed to YourMoney.com.
However, the move is subject to a “satisfactory response” from the Competition and Markets Authority (CMA), though NatWest said it expects completion to occur in the second half of 2024.
The lender said that the current weighted average loan to value (LTV) was circa 62%.
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Earlier this month, it was reported that Metro Bank was revisiting its mortgage portfolio sale, having shelved the idea last year, citing market conditions.
The firm had been seeking a sale last year to improve profitability and reduce risk-weighted assets as it looked for a £925m rescue package.
This was approved by shareholders in November and was made up of £325m capital raise and £600m of debt refinancing.
‘Focused on a smooth transition’
Paul Thwaite, CEO of NatWest Group, said: “This transaction is a further opportunity to accelerate the growth of our retail mortgage book within our existing risk appetite, with attractive returns. It is in line with our strategic priorities and builds on our recent acquisition from Sainsbury’s Bank.
“We are focused on a smooth transition and have a strong track record of successful integration with Metro Bank, following our previous acquisition of mortgages in 2020.”
Daniel Frumkin, Metro Bank’s CEO, added: “The sale of part of our residential mortgage portfolio is earnings-, NIM- and capital ratio-accretive. The sale is in line with Metro Bank’s strategy to reposition its balance sheet for higher risk-adjusted returns on regulatory capital.
“The additional lending capacity provided by this sale will enable us to continue our shift into high-yielding assets in niche and under-served markets and become a specialist lender of choice.”
This article was originally published by YourMoney.com‘s sister title, Mortgage Solutions. Read: NatWest to buy Metro Bank’s residential mortgage portfolio for £2.4bn
