(Adds NatWest's statement)
Dec 18 (Reuters) - Britain's Metro Bank Plc said on
Friday it will sell a portfolio of owner-occupied residential
mortgages to NatWest Group Plc for up to 3.13 billion
pounds ($4.23 billion), as it looks to boost its capital levels
hit by the COVID-19 pandemic.
The deal is at a 2.7% premium on gross book value of the
portfolio and is expected to result in a gain of about 83
million pounds, Metro said.
In October, it warned that its capital levels were below
buffers expected by regulators. Its core capital ratio including
additional funding, known as MREL, stood at 20%, below the
required excess buffer level.
NatWest Chief Executive Officer Alison Rose said "Growing
our mortgage book is an important strategic priority as we build
a bank that delivers sustainable returns for shareholders." "The
addition of this loan book will supplement the strong organic
growth that we continue to achieve," she added.
On completion of the deal, Metro Bank's Sept. 30, 2020 total
capital plus MREL ratio is expected to improve 400bps to 24.2%.
"The sale (will) ... enable us to shift our asset mix and
expand our unsecured lending portfolio, following our entry into
the market with the acquisition of RateSetter earlier this
year," Metro CEO Daniel Frumkin said.
"The transaction also removes any current need to issue MREL
qualifying debt."
Bank of England is expected to complete the review of
corporate banks' approach to setting a minimum requirement for
own funds and eligible liabilities (MREL) by the end of the
year.
($1 = 0.7403 pounds)
(Reporting by Aakriti Bhalla in Bengaluru; Editing by Shinjini
Ganguli)
Natwest (NWG)
