By James Salmon for the Daily Mail Published: 17:34 EDT, 20 October 2015 | Updated: 17:34 EDT, 20 October 2015 Risky assets: TSB is hoping to buy some of Northern Rock's most toxic loans TSB is hoping to buy some of Northern Rock’s most toxic loans which were swallowed up by the Government’s ‘bad bank’ during the financial crisis. The challenger bank – now owned by Spain’s Sabadell – is thought to be in discussions with a consortium of investors, led by Morgan Stanley, which has mounted a successful bid for the £12bn ‘Granite’ portfolio. Granite was a complex financing vehicle set up by Northern Rock to raise money on the financial markets before it collapsed during the financial crisis. The huge portfolio of securitised mortgages is run by UK Asset Resolution, which was set up by the government to run the most risky assets of Northern Rock and nationalised Bradford & Bingley that noone else wanted to buy. The ‘good part’ of Northern Rock, including less risky loans and branches, was sold to Virgin Money. But the Granite portfolio – which included the risky 125 per cent Together loans – is now paying healthy returns as the economy has improved and less people have defaulted on their mortgages. Another consortium including Royal Bank of Scotland and Goldman Sachs has been competing to buy the loan book. A spokesman for TSB, which was bought by Sabadell earlier this year, declined to comment. Advertisement Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.
It , which is now owned by Banco Popular , is among a consortium of banks , led by Morgan Stanley , over purchasing some of Northern Rock 's most toxic assets , which were incorporated into the Catalan government 's ' bad bank " during the financial crisis .