Can Banks or Asset Managers Sell Receivables in the UK?
Yes, banks and asset managers in the United Kingdom are legally permitted to sell receivables and loan claims, and this practice is well established within the UK financial market. The sale of receivables is a key instrument for balance sheet management, liquidity generation and credit risk reduction, particularly in regulated financial institutions.
What does the sale of receivables mean in the UK context?
In the UK, receivables are typically transferred through an assignment of rights under English law. This can take the form of a legal assignment or an equitable assignment, depending on the transaction structure. Through this process, the original lender transfers its rights to receive payments from a borrower to a third party, such as an investor, fund or specialist debt purchaser.
Why do UK banks and asset managers sell receivables?
Banks frequently use receivable sales to manage capital requirements, improve regulatory ratios and reduce exposure to non-performing loans (NPLs). Asset managers, on the other hand, may sell receivables to rebalance portfolios, realise value for investors or focus on core investment strategies. In addition, the sale of loan portfolios can significantly reduce administrative and servicing costs.
What types of receivables can be sold?
In principle, most types of receivables can be sold under UK law, provided there are no contractual restrictions. These include performing and non-performing loans, commercial real estate debt, SME loans, consumer credit receivables and secured or unsecured claims. The UK market is particularly active in the sale of NPL portfolios and distressed debt.
Conclusion
The sale of receivables is a lawful, common and strategically important tool for banks and asset managers operating in the UK. It enables institutions to strengthen their balance sheets, manage risk effectively and unlock liquidity. For investors, receivable acquisitions offer attractive opportunities, especially when transactions are professionally structured and compliant with UK regulatory standards.
If you are considering selling receivables or loan portfolios in the UK, a structured, transparent and legally robust sales process is essential to achieve optimal results.
Timur Peters is the founder of Debitos GmbH. He holds a diploma in finance and law. He is Expert of the NPL Advisory Panel at the European Commission in Brussel and has more than 20 years’ experience in the range of finance.
Before Founding Debitos Timur Peters was responsible in the distribution of Software for Banks and Financial Institutions for Comarch for the D/A/CH Region. Next to this he has worked for several years as a self employed Project Consultant in the area of Financing of Litigation cases, Peer2-Peer Credit Marketplaces and other online projects for financial institutions.
Website:
https://www.debitos.com
Disclaimer
The information provided on this website is for general informational purposes only and does not constitute legal, tax, financial, or professional advice. While we strive to ensure accuracy and completeness, no guarantee is given regarding the timeliness, correctness, or completeness of the content. The content does not replace individual advice from qualified legal, tax, or financial professionals. Any actions taken based on the information provided are done at the user’s own risk. Liability for any direct or indirect damages arising from the use or non-use of the information presented is excluded to the fullest extent permitted by law.
(Image rights: https://www.istockphoto.com/de/portfolio/WirestockInc)
Comments are closed here.