Shares of UK-based Metro Bank (LON: MTRO) are rallying on Monday after NatWest Group revealed that it has entered into an agreement with Metro to acquire a £3 billion portfolio of UK prime Mortgages.
The portfolio consists of owner-occupied residential mortgages with a weighted average current loan to value of c.60%
The agreement will see NatWest acquire over 13,000 customers who will continue to be serviced by Metro Bank. NatWest said that the purchase price of £3.1 billion represents a 2.7% premium on the gross book value.
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“Growing our mortgage book is an important strategic priority as we build a bank that delivers sustainable returns for shareholders. The addition of this loan book will supplement the strong organic growth that we continue to achieve,” commented Alison Rose, Natwest’s CEO.
NatWest said that its strong capital position has provided it with the flexibility to navigate the current uncertain environment.
Metro Bank shares surged after the news, climbing over 12% after the open. They are currently trading at 124.55p, up 8.49% at the time of this publication.