Metro Bank has completed the purchase of a portfolio of UK mortgages from Cerberus European Residential Holdings B.V. for £596.7m.

The bank said that all lending in the portfolio is secured on property, “well diversified” across the UK, and has a similar credit risk profile to Metro Bank’s current mortgage book.

The portfolio consists of approximately 92% buy-to-let mortgages, with the remainder being owner occupied. The portfolio has a weighted average seasoning of around 10 years and the weighted average loan to value is circa 70%, with a current expected pay rate of c.1.6% principally linked to the Bank of England base rate.

The consideration of £596.7m represents the value at which the acquired mortgages will be taken on to the Bank’s balance sheet and is being financed using cash from existing resources. The portfolio is being acquired at a discount to par.

Craig Donaldson, CEO, said: “Our lending and deposit growth has gone from strength to strength and the acquisition of this high-quality loan portfolio supports our high-growth, organic business model as we track ever closer to our 2020 guidance. In particular the acquisition increases the Loan to Deposit ratio to c.78% (2020 guidance c.80%).

“The portfolio complements our existing mortgage book and demonstrates our willingness and ability, helped by our strong deposit growth, to take advantage of opportunities as they arise.”