UK government plans to sell failed Bradford & Bingley’s mortgages worth $23 bn

British finance minister George Osborne is planning to announce the sale of mortgages worth £16 billion ($23 billion) of failed Bradford & Bingley (B&B) bank rescued by the government when he unveils the budget this week, Sky News on Saturday reported, quoting unidentified government officials.

B&B was bailed out by the British government in during the global financial crisis in 2008. (See: Third British bank set to fall as B&B is nationalized)

Post nationalisation, B&B's saving and retail branch business was sold to Abbey National (now unit of Banco Santander SA's UK operation), while the government kept the mortgage business.

Santander, the Spanish banking giant had acquired B&B's 200-branch network and £21 billion deposits for £150 million, leaving the UK Treasury to nationalize the remaining £50 billion bad debts.

B&B, which specialised in buy-to-let mortgages and self-certification loans, was Britain's biggest lender to landlords with 2.5 million customers and 1 million shareholders.

The mortgages could be sold off in parts or whole the report said.

The sale comes three months after the UK government sold £13 billion of mortgages of another nationalized bank Northern Rock to US private equity firm Cerberus Capital (See: UK treasury sells $13 bn of Northern Rock mortgages).

Osborne later said that a further £7.5 billion of mortgages could be sold off by UK Asset Resolution (Ukar), the body that looks after loans issued by Northern Rock and B&B.

Osborne plans to present a budget that will show a surplus by the end of the decade, but a weaker economy and lower tax revenues is stalling his efforts. His plan to sell the government's shares of Royal Bank of Scotland Group Plc, which could generate as much as £5.8 billion, has stalled, Bloomberg reported.