UK’s Metro Bank buys mortgage portfolio from Cerberus Capital

(Reuters) – British lender Metro Bank Plc <MTRO.L> said it had bought a portfolio of UK mortgages from a company owned by Cerberus Capital Management LP [CBS.UL] for 596.7 million pounds ($768.2 million).
Metro Bank, which offers retail, business and private banking, said all lending in the portfolio is secured on property and has a similar credit risk profile to its current mortgage book.
“The acquisition of this high-quality loan Portfolio supports our high-growth, organic business model as we track ever closer to our 2020 guidance,” Chief Executive of Metro Bank, Craig Donaldson, said.
The acquisition will increase the loan-to-deposit ratio to about 78 percent, compared with the 2020 guidance of 80 percent, Donaldson added.
The portfolio, bought from Cerberus European Residential Holdings B.V, is made up primarily of buy-to-let mortgages, with the rest being owner-occupied.
The acquisition of the mortgages, being bought at a discount to face value, will be financed using cash from existing resources, Metro said.

(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Amrutha Gayathri)