Metro Bank Sells Residential Mortgages to NatWest Group: On Friday, Metro Bank in the United Kingdom said that it would sell its prime residential mortgages to NatWest Group, a banking and insurance company for up to 2.4 billion pounds ($3.1 billion) in cash.
NatWest Group in a statement said that in the first half pre-tax its operating revenue dropped by 6% to 3 billion pounds ($3.86 billion) because of the competition in the mortgage sector that influenced the savers to move their money to higher-paying products.
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Meanwhile, for Metro Bank, this deal is expected to reduce the risk-weighted assets by about 824 million pounds which will help the bank to increase the British lender’s Common Equity Tier 1 (CET1) ratio by five basis points.
After the global financial crisis, the Metro Bank challenged Britain’s big banks but unfortunately had to accept a 925 million pound rescue package last year and since then the bank has cut its costs to fix its balance sheet.
In a statement, Metro Bank PLC said that this deal of selling its residential mortgages to NatWest Group is part of its plan to fix its balance sheet and improve risk-adjusted returns on capital.
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The Metro Bank PLC was established by Anthony Thomson and Vernon Hill and has been operating in the United Kingdom since 2011.
However, NatWest Group has reported that it expects a return on real equity from 12% to above 14% and also expects to hit a revenue mark of about 14 billion pounds.
On Friday, in a statement, NatWest CEO Paul Thwaite noted, “Our customers are beginning to feel more confident, with activity increasing and asset quality remaining strong, and we are well positioned to help unlock growth across the UK through our unrivalled regional network.”
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