I can today confirm that I have laid a Treasury minute informing the House of a contingent liability that HM Treasury has taken on in relation to the sale of certain NRAM loans acquired by HM Treasury during the financial crisis. Although the sale of those loans was completed in 2016, the Government are now amending the contractual protections that were provided to the purchaser, in order to facilitate the potential future sale of NRAM.
On this occasion, due to sensitivities surrounding the commercial negotiations, it was not possible to notify Parliament of the particulars of the liability in advance of the amendments to the contractual protections being agreed with the beneficiaries.
The contingent liability relates to certain market standard time and value capped warranties and indemnities confirming regulatory, legislative and contractual compliance. The maximum contingent liability arising from these warranties and indemnities is £1 billion.
I will update the House of any further changes in respect of NRAM as necessary.