NatWest acquires Metro Bank’s $3b mortgage portfolio

By Gloria Methri

NatWest Group has signed an agreement with Metro Bank to acquire a £2.5 billion portfolio of prime UK residential mortgages, with a weighted average current loan-to-value of c.62%.

On completion of the transaction, NatWest Group expects to welcome around 10,000 customer accounts, which will continue to be serviced by Metro Bank following the transfer to NatWest Group.

Commenting on the transaction, Paul Thwaite, CEO of NatWest Group, said, “Following today’s announcement, we are acquiring £2.5 billion of prime residential mortgages from Metro Bank and, as a result, look forward to welcoming around 10,000 customers to NatWest Group.”

He added, “This transaction is a further opportunity to accelerate the growth of our Retail mortgage book within our existing risk appetite, with attractive returns. It is in line with our strategic priorities and builds on our recent acquisition from Sainsbury’s Bank. We are focused on a smooth transition and have a strong track record of successful integration with Metro Bank following our previous acquisition of mortgages in 2020.”

Natwest Group had recently acquired Sainsbury’s retail banking business as the supermarket company withdrew from the sector to focus on grocery. The deal, worth £2.5 billion ($3.2 billion), comprised Sainsbury’s outstanding credit card, unsecured personal loan and saving accounts.

The move increased NatWest’s assets and customer accounts, aligning with the bank’s strategy to expand its retail banking operations. It followed a similar transaction earlier this year when supermarket chain Tesco sold most of its banking activities to Barclays for £600 million.