Challenger lender Metro Bank PLC (LON:MTRO) is paying £596.7mln for a portfolio of UK mortgages from a company owned by Cerberus Capital Management.
The FTSE 250-listed firm said the portfolio, bought from Cerberus European Residential Holding, is primarily made up of buy-to-let mortgages, approximately 92%, with the rest being owner-occupiers.
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It added that all lending in the portfolio is secured on property and has a similar credit risk profile to its current mortgage book.
Metro Bank said the acquisition of the mortgages, being bought at a discount to face value, will be financed using cash from existing resources.
Craig Donaldson, Metro Bank’s chief executive, said: "The acquisition of this high-quality loan Portfolio supports our high-growth, organic business model as we track ever closer to our 2020 guidance."
He added that the acquisition will increase the bank’s loan-to-deposit ratio to about 78%, compared with the 2020 guidance of 80%.
In early morning trading, Metro Bank shares were 1.5%, or 56p higher at 3,775p.
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