The portfolio of high-margin residential mortgages comes from a warehouse financed by Goldman Sachs
BNK Banking Corporation Limited has acquired a portfolio of high-margin residential mortgages worth approximately £80 million.
The mortgages were purchased from a warehouse financed by Goldman Sachs, a facility for which BNK is responsible for origination, underwriting, and servicing.
The portfolio comprises floating rate mortgages, with a maximum loan balance of £2.94 million and a weighted average loan-to-value Ratio (LVR) of 57%. The highest LVR in the portfolio is 80%.
The acquisition is set to expand BNK’s loan book by 5.6%, bringing its total to £1.5 billion. It is expected to positively impact the bank’s net interest margin, indicating a strategic move to enhance profitability.
Last month, the bank announced that its net interest income fell by 1.1% to £8.6 million due to increased competition affecting loans and deposits, while its direct net interest margin decreased by 0.31% to 1.01%, also attributed to the competitive landscape.
“The acquisition of these higher-margin residential mortgages represents the optimal use of capital and provides BNK with added growth impetus bringing us closer to achieving our goal of sustainable cash profitability,” said Allan Savins, chief executive of BNK Bank. “This transaction will also free up BNK’s additional funding capacity for the specialist warehouse and will be revenue accretive for the bank.”
In 2021, BNK launched a $500 million uncommitted specialist residential securitisation warehouse in collaboration with Goldman Sachs.
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