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Virgin Money agrees to buy £465m high quality mortgage book from UKAR

  • Customers will be welcomed to Virgin Money later in the year and benefit from the full range of its products and services
  • High quality of acquired mortgages complement Virgin Money’s existing mortgage book

Virgin Money has agreed to acquire £465 million of high quality NRAM mortgage assets from UK Asset Resolution (UKAR), the holding company for NRAM and B&B.

Virgin Money will be contacting those customers who will be welcomed to the business closer to the transfer date, which is expected to be before the end of the year. Until then, their loans will continue to be managed by NRAM.

Once customers become part of Virgin Money, they will be able to benefit from its full range of products and services, including branch access at 75 Stores around the country. There will be no changes to customers’ terms and conditions as a result of the transfer.

The transaction enables Virgin Money to deploy some of its excess liquidity to grow its mortgage book with high quality loans that complement the existing book structure. The acquisition will not significantly affect either the average LTV of the book, which currently stands at 64%, or the 3+month arrears position of the Virgin Money mortgage book, which stands at 0.31% (CML average 2.00%). The acquisition does not change Virgin Money’s organic growth plans or its stated target of providing £45 billion of new lending between 2012 and 2017.

Jayne-Anne Gadhia, Chief Executive of Virgin Money said: “I am delighted to be able to welcome this new group of customers to Virgin Money and we will be making every effort to make the transition simple and straightforward for them.

“This is an excellent acquisition for us. It is sensible deployment of some of our excess liquidity and allows us to grow our mortgage book with high quality mortgages. UKAR has confirmed that it intends to use the proceeds of the acquisition to further repay their government loan, in the best interests of taxpayers, and so this transaction offers a great example of our philosophy of making everyone better off.”

ENDS

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About Virgin Money

  • Virgin Money acquired Northern Rock plc from Her Majesty’s Treasury on 1 January 2012
  • The purchase price, which has the potential to deliver up to £1 billion in total for the taxpayer, comprised £747 million in cash paid on completion, a further £73 million of deferred consideration which has now been paid in cash, £150 million in the form of a capital instrument and an additional cash consideration of £50-80 million paid upon a future profitable IPO or sale in the next five years
  • Virgin Money provides credit cards, mortgages, savings, pensions, investment and protection products to over four million customers
  • Virgin Money’s business ambition is to make “everyone better off” – this philosophy underpins our approach to business by offering good value to customers, treating employees well, making a positive contribution to society and delivering a profit to shareholders
  • Virgin is the official sponsor of the London Marathon, the biggest annual fundraising event in the world. Virgin Money leads the London Marathon sponsorship with the ambition to help runners raise £¼ billion over 5 years and will use its infrastructure, online capability and financial expertise to deliver that through Virgin Money Giving