RBS rolls out commercial mortgage backing

Signalling a return to the investment market, the Royal Bank of Scotland (RBS) has announced it will issue £4.7 billion in commercial mortgage-backed securities – which experts hope will signal a return to a more positive lending environment.

Following increasing interest from investors in commercial mortgage-backed securities over the last few months, the banking group has decided it wants to get in on the act.

Following the collapse of the market in 2007, mortgage-backed securities (MBS) gained a bad reputation. However, much of the blame was attributed to the parcelling up of risky sub-prime loans with safer mortgages.

RBS is using its property investment portfolio to provide the backing for the £4.7 billion, which will be made up of new prime residential mortgages from RBS and NatWest Homeloans. It will be the bank's first such venture since the financial downturn began.

The venture will act as a fundraising measure to allow the group to start lending on a wider scale once again across the UK.

If successful, it will raise funds which will then be available for businesses and investors to borrow, something which analysts are hoping will kick start lending, enticing other banks to increase their lending capacity in the same way.

Share this article

Latest Businesses for Sale

View more businesses for sale