TSB in 1.4 billion pound mortgage book bid

Sky News reported that TSB’s chief executive Pail Pester is interested in acquiring the residential loan book of UK Asset Resolution, the government’s ‘bad bank’, which was put up for sale last month.

Last month, the state-owned organisation confirmed the intention to sell the mortgage portfolio in a statement.

The statement said: “The completion of any sale will not affect the terms and conditions of the mortgages sold, and the continued fair treatment of customers will be a key consideration for UKAR in assessing the merits of a sale.

“The proposed sale is in line with UKAR's strategy and is part of the orderly wind-down of the closed mortgage books of both B&B and NRAM. UKAR will only complete the transaction if the sale price achieved represents value to the taxpayer.”

The bank, which has 631 branches and about 4.5 million customers, is majority owned by Lloyds Banking Group which itself is 25% owned by UK taxpayers.

TSB was originally going to be sold to the Co-operative Group before the emergence of a £1.5bn black hole on the mutually owned bank's balance sheet.

In July 2012, UKAR mortgage agreed the sale of £465m of Northern Rock Asset Management (NRAM) loans to Virgin Money. This is the first such transaction since.