The portfolio – with all loans secured on property across the UK – has been acquired from Cerberus European Residential Holdings B.V.
The challenger bank stated that the portfolio has a similar credit risk profile to its current mortgage book and is made up of around 92% buy-to-let mortgages, with the remainder being owner occupied.
It has a weighted average seasoning of roughly 10 years and the weighted average LTV is approximately 70% with a current expected pay rate of circa 1.6%, principally linked to the Bank of England base rate.
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“Our lending and deposit growth has gone from strength to strength and the acquisition of this high-quality loan portfolio supports our high-growth, organic business model as we track ever closer to our 2020 guidance,” said Craig Donaldson, CEO of Metro Bank.
“In particular, the acquisition increases the loan-to-deposit ratio to c.78% (2020 guidance c.80%).
“The portfolio complements our existing mortgage book and demonstrates our willingness and ability, helped by our strong deposit growth, to take advantage of opportunities as they arise.”
The £596.7m consideration reflects the value at which the acquired mortgages will be taken on to the bank’s balance sheet and is being finance using cash from existing resources.
The announcement comes after Metro surpassed one million customer accounts and reported a 59% surge in commercial lending.
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