Metro Bank sell £521m mortgage book
An American hedge fund has purchased a mortgage book worth £521m from Metro Bank.
This sale comes after a series of troubles at Metro Bank, with recent financial results showed profits had dropped from £20.8m in 2018 to £3.4m in the first half of 2019.
Metro confirmed has confirmed that this £521m loan book was purchased from Cerberus in 2017, which means their customers will not be affected by this sale as none of the loans were managed by the bank.
Paul Riseborough, chief commercial officer at Metro Bank, said: “Within our H1 2019 results, we confirmed the sale of a £521m loan portfolio to Cerberus.
“The loans in this portfolio are not Metro Bank-originated mortgages. Metro Bank originally bought this loan portfolio from Cerberus in 2017, and Cerberus has now re-acquired the portfolio.
“The lender of record for this portfolio has been, and will continue to be, Capital Home Loans (CHL) Mortgages (a wholly-owned subsidiary of Cerberus); therefore there is no impact on these mortgage-holders as a result of this sale.”
US hedge fund Cerberus Capital Management have had a long-standing relationship with the bank, with Metro purchasing £1bn worth of loans from Cerberus in recent years.
Cerberus is not an active lender but is classified as a ‘zombie’ bank which cannot alter terms on existing mortgages or sell any new products to borrowers.
This news comes as Metro announced that its founder Vernon Hill will be replaced as chairman, and will instead hold a non-executive director role.