Chancellor looks to sell £15.7bn in B&B mortgages

Chancellor George Osborne is looking to sell £15.7bn of Bradford & Bingley mortgages in order to recoup the £16bn of taxpayer cash used to bail out the lender at the height of the financial crisis.

The Treasury said this was expected by the end of March 2018, but cautioned that it would be subject to market conditions and ensuring “value for money”.

The Treasury also insisted it would launch a retail share sale in Lloyds Banking Group within the next 12 months – a move it delayed last year due to market turbulence – and confirmed its intention to raise up to £25bn by selling shares in the Royal Bank of Scotland by the end of 2019-20.

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The Government still plans to fully privatise Lloyds by the end of 2016/17 by selling its shares to the public.

It is thought that a consortium of banks, including Barclays, HSBC and Lloyds have submitted proposals to the Treasury to guarantee financing to buyers of the B&B loans in a bid to help the Treasury plans.

These banks are also understood to be liable for the interest on the loan that was used to fund it during the 2008 financial crisis – totalling some £400m last year.

The Treasury said since 2010 it has recovered £75bn of taxpayer cash used to bail out banks and savers’ money caught up in the failure of Icelandic bank Landsbanki.