Mortgage Sale idea revived by troubled Metro Bank

It appears that Metro Bank has resuscitated a plan to sell much of its mortgage book after being rescued from potential collapse.

There is now word yet on possible buyers.

The lender says it’s in discussions over a potential sale of residential mortgages, handled via Morgan Stanley to raise capital.

Sky News says the size of the portfolio is reportedly yet to be finalised, with suggestions that it could end up between £3 billion and £4 billion - slightly above the level reported last year when it reportedly entered talks with Barclays about a possible disposal.

At that time the mortgage sale was seen as necessary to bolster Metro Bank’s balance sheet after the Bank of England did not approve its request to use its own models to assess risks on its mortgages and assets.

Metro Bank has some 2.7m customers since becoming the first new lender to open on Britain's high streets in over 100 years back in 2010. It now has over 70 branches across the country.

Sky says the crisis which engulfed it last autumn triggered fears of a run on its deposit base, but withdrawals rapidly returned to normal levels in the aftermath of the recapitalisation agreement.