NatWest buys £3.1bn prime mortgage portfolio from Metro Bank

NatWest has entered into an agreement with Metro Bank to acquire a £3bn portfolio of prime UK mortgages, it announced on Monday.

The FTSE 100 company said the portfolio consists of owner-occupied residential mortgages, with a weighted average current loan to value of around 60%.

As part of the transaction, NatWest said more than 13,000 customers would continue to be serviced by Metro Bank in accordance with current arrangements, following the transfer to NatWest.

The purchase price of £3.1bn represented a 2.7% premium on gross book value.

NatWest said the impact of the transaction, based on its CET1 ratio as at 30 September, equated to a reduction of around 15 basis points.

“Growing our mortgage book is an important strategic priority as we build a bank that delivers sustainable returns for shareholders,” said chief executive officer Alison Rose.

“The addition of this loan book will supplement the strong organic growth that we continue to achieve.

“Our strong capital position, well above the target range, continues to provide the flexibility to navigate the uncertain environment and support our customers during the challenging times ahead.”

At 0805 GMT, shares in NatWest Group were down 5.75% at 148.5p, while those in Metro Bank were 18.63% higher at 139.95p.