Hogan Lovells And Pinsent Masons Advised On Metro Bank’s £2.4bn Mortgage Portfolio Sale To NatWest Group
Hogan Lovells and Pinsent Masons are advising on the sale of Metro Bank’s portfolio of prime residential mortgages to
Hogan Lovells And Pinsent Masons Advised On Metro Bank’s £2.4bn Mortgage Portfolio Sale To NatWest Group
Hogan Lovells and Pinsent Masons are advising on the sale of Metro Bank’s portfolio of prime residential mortgages to NatWest Group for up to £2.4 billion in cash.
This deal is the latest in a series of consolidations in the UK’s crowded banking market this year, following NatWest’s acquisition of UK retailer Sainsbury’s banking business in June, in a deal that saw A&O Shearman and Linklaters advising the respective parties.
The sale will provide a much-needed cash injection for Metro Bank, founded in 2010 to challenge the dominance of Britain’s high street banks. Metro Bank struck a £925 million rescue deal last November following setbacks including accounting errors and leadership departures.
Hogan Lovells team, led by senior London M&A Partner John Allison and financial services Partner James Black, acted for Metro Bank on the deal, while Pinsent Masons advised NatWest.
The Hogan Lovells team also included client relationship Partner Dan Simons, Charles Jemmett (M&A, Counsel), Blaise Salle (M&A, Associate), Julie Patient (Financial Services, Counsel), Dan Park (Financial Services, Associate), Partner Angus Coulter (Competition), Juliette Parkinson (Competition, Associate), Partner Stefan Martin (Employment), Anvita Sharma (Employment, Counsel), Alex Rutherford (Privacy and Cybersecurity, Senior Associate), and Tom Eyre-Brook (Tax, Counsel).
Metro Bank’s legal team was led by general Counsel Stephanie Wallace and Senior Legal Counsel Oliver Storey.
Metro Bank stated that the sale aligns with its strategy to reposition its balance sheet and enhance risk-adjusted returns on capital. “The transaction is earnings, NIM, and capital ratio accretive, and the sale creates additional lending capacity to enable Metro Bank to continue its asset rotation towards higher-yielding commercial, corporate, SME lending, and specialist mortgages,” the bank said in a statement. However, it added that the mortgage portfolio had been originated when interest rates were lower and it would realize a roughly £105 million loss upon completion of the sale.
The deal will bring NatWest around 10,000 customer accounts.
NatWest Group Chief Executive Paul Thwaite said the deal was a “further opportunity to accelerate the growth of our retail mortgage book within our existing risk appetite, with attractive returns.”
Earlier this year, a Hogan Lovells team, including Allison, advised Barclays on its £600 million acquisition of most of Tesco’s banking operations, with Freshfields acting for Tesco on the sale.