Metro Bank sells residential mortgages to NatWest

26th Jul 2024 08:37

(Sharecast News) - Metro Bank inked a deal to sell a portfolio of residential mortgages to NatWest Group.

The portfolio, which had a book value of £2.5bn, was sold for £2.4bn in cash.

Metro said that the transaction would contribute to repositioning its balance sheet, rotating towards higher yielding commercial, corporate, SME lending and specialist mortgages.

"The sale of part of our residential mortgage portfolio is earnings, NIM and capital ratio accretive," Metro boss Daniel Frumkin said.

"[...] The additional lending capacity provided by this sale will enable us to continue our shift into high yielding assets in niche and underserved markets and become a specialist lender of choice."

Risk weighted assets were expected to reduce by roughly £824m, while the lender's 31 December 2023 total capital plus MREL ratio would get a 114 basis point boost to reach 23.1%.

As of 0835 BST, shares of Metro Bank were rising by 5.28% to 39.85p.