Treasury making moves to offload part of B&B

The Treasury was preparing to offload part of former mortgage lender Bradford & Bingley on Wednesday, in what could be the biggest ever sale of finance assets in the United Kingdom.

Sky News reported that UK Financial Investments, the agency charged with managing the public interest in bailed-out banks, had begun the process of finding advisors to investigate privatising a £17bn loan book.

If a transaction of such a size were to go ahead, it would be significantly larger than the previous biggest disposal - the £13bn offload of thousands of Northern Rock mortgages, announced by the Chancellor in November.

It's understoon a document was passed around City banks discussing the idea, though the project was in its infant stages.

One City insider told Sky that it was "a scoping exervise designed to look at these assets, and what the options might be and whether a privatisation might be possible", and nothing further at this stage.

The £17bn loan book was also understood to be separate to the £7.5bn portfolio held by UK Asset Resolution, which George Osborne announced would be sold as poart of his Autumn Statement.

Any sale would be some time away, however, as the Northern Rock 'granite' portfolio was still expected to take several months and significant resource. At the time of its announcement, the Chancellor called it a "milestone in clearing up the mess left by the financial crisis".

He also said it was looking like taxpayers would be turning a healthy profit from the bailout, getting more money out of Northern Rock than they put in during the crisis.

Bradford & Bingley was bailed out in September 2008. Its retail deposit assets were swallowed by Santander, while its mortgage and loan books and other assets were held in public ownership.

Official sources were not commenting on the exercise on Wednesday.