Pimco is not the only bidder for the final tranche of customer loans, with other acquirers of UKAR assets, such as the hedge fund Cerberus Capital Management, also expected to be interested.
The nationalisation of Northern Rock and B&B during the frenzied period of the financial crisis required the government to lend £48.7bm to fund their giant balance sheets.While the financial outcome has proved to be satisfactory, UKAR has found itself at the centre of a growing row about so-called 'mortgage prisoners', where customers find themselves trapped with lenders which are not active in the market.
"We have launched a transaction aimed at selling the legal entities of NRAM and B&B, along with their remaining assets, which would allow us to complete our objective and dispose of the Government's investment in these businesses," a UKAR spokesman said. The sale of the remaining UKAR loans will leave taxpayers' stake in Royal Bank of Scotland as the final residual holding in the banking sector more than a decade after its bailout.