Market Analysis

Metro Bank announced on Friday that it is selling its prime residential mortgage portfolio to NatWest Group for up to £2.4 billion ($3.1 billion) in cash.

This transaction is anticipated to decrease Metro Bank's risk-weighted assets by approximately £824 million and improve its Common Equity Tier 1 (CET1) ratio by about five basis points, according to the bank's statement.

Founded to challenge the UK's major banks following the global financial crisis, Metro Bank secured a £925 million rescue deal last year and has since implemented cost-cutting measures to stabilize its finances.

The sale aligns with Metro Bank's strategy to "reposition its balance sheet and enhance risk-adjusted returns on capital." However, the bank noted that the mortgage portfolio, originated when interest rates were lower, would result in a £105 million loss upon completion of the sale.

Paraphrasing text from "Reuters" all rights reserved by the original author.