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The bailed-out Royal Bank of Scotland is understood to be considering a bid for a state-owned mortgage portfolio. It is said to be among a number of prospective bidders that have shown an interest in buying Granite, a £13bn mortgage securitisation vehicle established 15 years ago by Northern Rock.
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Granite is now managed by UK Financial Investments, which also owns the government’s 80% stake in RBS. If successful, it will be RBS’s first big deal since it was rescued in 2008.
RBS may team up with other bidders, including private equity firms, to buy Granite, or it may decide to not bid at all, Sky News said on Wednesday.
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The state-owned bank is said to be looking to deploy some of its surplus funds through the potential purchase and is targeting UK retail and commercial business to enlarge its mortgage market position.
The move would be in line with RBS strategy. Last year, its chief executive, Ross McEwan, said he would reposition the bank as a UK-focused retail and commercial lender.
The deal would be within the limits of the EU state aid agreement, which restricts the bank from deals exceeding a certain valuation. The chancellor, George Osborne, announced plans to sell the £13bn of mortgage assets in March, to woo voters before the general election.
