The UK Treasury said it authorised the £11.8 billion sale of Bradford & Bingley (B&B) loans acquired by the taxpayer during the financial crisis to Prudential plc and to funds managed by Blackstone.

“The price achieved reflects the strong credit quality of the portfolio and the outcome of a highly competitive sale process,” said the Treasury.

“It delivers value for money for the taxpayer and compares favourably with the ‘fair value’ of the B&B loan book disclosed in B&B’s accounts last year.

“The fair value of the B&B loan book is less than its book value, reflecting the low interest rates payable on the loans.”

UK Asset Resolution (UKAR) manages the closed loan books of Bradford & Bingley and Northern Rock on behalf of the taxpayer.

“Allowing for today’s transaction, UKAR’s balance sheet now stands at £22 billion, down from £37 billion in September 2016 and from £116 billion in 2010,” said the Treasury.

UK chancellor Philip Hammond said: “The sale of these Bradford & Bingley assets for £11.8 billion marks another major milestone in our plan to get taxpayers’ money back following the financial crisis.

“We are determined to return the financial assets we own to the private sector and today’s sale is further proof of the confidence investors have in the UK economy.”

At the 2016 Budget, the UK government announced it would explore a programme of sales designed to raise sufficient proceeds for Bradford & Bingley to repay £15.65 billion debt to the Financial Services Compensation Scheme and, in turn, the corresponding loan from the Treasury.

Friday’s sale is the first in that programme.

There will be no changes to the terms and conditions of the loans sold.

Borrowers do not need to take any action.