UKAR agrees to transfer of mortgage servicing operations

As a result of the deal, around 1,700 staff based in Sunderland and Crossflatts in West Yorkshire will transfer to Computershare.

The seven-year outsourcing contract covers £30bn of assets. UKAR will continue to own and have ultimate responsibility for NRAM and Bradford & Bingley (B&B) mortgages and loans.

UKAR is winding down the loans of the two bailed out lenders, which were nationalised during the financial crisis of 2007 to 2009.

In a statement, UKAR said: “There will be no changes to customers’ terms and conditions. UKAR will retain the remaining 250 employees who will continue to manage the balance sheets of NRAM (Northern Rock Asset Management) and B&B and through UKARcs (UKAR Corporate Services Limited) administer the Government’s Help to Buy Mortgage Guarantee Scheme and Help to Buy ISA.”

UKAR said that the deal will facilitate UKAR’s ability to undertake more asset sales and continue the reduction of the Government debt.

The statement added: “It ensures that UKAR’s existing mortgage processing capabilities remain robust and provides stability and continuity of service to customers. It also helps safeguard jobs as the colleagues transferring to Computershare are joining a company with the ambition to grow its business.”

Richard Banks, the chief executive officer of UKAR, commented: “Today’s announcement is great news, made possible because of the exceptional debt management and customer service capabilities that UKAR has developed. Working with Computershare provides stability of service for our customers and enables UKAR to focus on maximising value for taxpayers.”

UKAR was advised by Credit Suisse and completion of the transaction is expected by this summer.

UKAR was established in October 2010 to carry out the management of the closed mortgage books of Bradford & Bingley and NRAM to maximise value for taxpayers, while treating customers fairly.

Computershare specialises in transfer agency and share registration, employee equity plans, proxy solicitation and stakeholder communications.

It also specialises in corporate trust, mortgage, bankruptcy, class action and utility administration, and a range of other financial and governance services.

Computershare has 15,000 employees worldwide.

In November last year, the Treasury revealed that it had sold £13bn of Northern Rock mortgages to investment firm Cerberus Capital Management in what it described as the largest ever asset sale by a European government.

UKAR said the sale would include residential mortgages and unsecured loans from the legacy book of Northern Rock Asset Management.

The sale represented a £280m premium over book value at June 30 2015, UKAR said in November, which added that it expected to repay around £5.5bn of the NRAM Government loan as a result of the transaction.

At the time, Chancellor George Osborne said it was clear that taxpayers would receive more money from Northern Rock than they put in during the financial crisis.

UK Asset Resolution Limited (UKAR) is the holding company established to bring together the Government-owned businesses of Bradford & Bingley (B&B) and NRAM plc.

UK Financial Investments Limited (UKFI) manages HM Treasury’s 100 per cent shareholding in UKAR Limited.

In October 2013, UKAR Corporate Services Limited (UKARcs), a subsidiary business of UKAR, became responsible for the administration of the Government’s Help to Buy Mortgage Guarantee Scheme on behalf of the Treasury.

Last December, UKARcs also became responsible for the administration of the Government’s Help to Buy ISA Scheme on the Treasury’s behalf.