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Metro Bank acquires £597m UK mortgage portfolio

Alex Lynn | 10:13 Friday 2nd June 2017

Metro Bank has announced the acquisition of a UK mortgage portfolio for £5967m.

The loans were purchased from Cerberus European Residential Holdings B.V.

The portfolio consists of approximately 92% buy-to-let mortgages, with the remainder being owner occupied.

“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,” said Craig Donaldson, CEO of Metro Bank.

“In particular, the acquisition increases the loan-to-deposit ratio to circa 8% (2020 guidance circa 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.”

The portfolio has a weighted average seasoning of around 10 years and a weighted average LTV of approximately70%.

The portfolio has a current expected pay rate of circa 1.6%, principally linked to the Bank of England base rate.

Metro Bank's £596.7m consideration represents the value at which the acquired mortgages will be taken on to the company's balance sheet and is being financed using cash from existing resources.

The portfolio is being acquired at a discount to par.

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