(1 June 2015 – Scotland) The Royal Bank of Scotland (RBS) is considering a bid for a state-owned mortgage portfolio.
There are a number of other prospective bidders interested in Granite, a £13 billion (A$26 billion) mortgage securitisation vehicle established in 2000 by Northern Rock.
Granite is now managed by UK Financial Investments, which also owns the government’s 80 percent stake in RBS.
If the bank’s bid is successful, it will be its first big deal since it was bailed-out in 2008.
It is reported that RBS could team up with other bidders to buy Granite.
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 European Union state aid agreement, which restricts the bank from deals exceeding a certain valuation.