Mortgage lender Bradford & Bingley is to sell its housing association loan book and portfolio of commercial property loans.
The company said the decision had been taken following a review of the growth potential and capital utilisation of the assets.
It added cash proceeds from the sales, totalling £4.2 billion, would allow Bradford & Bingley to improve its liquidity and provide funding for higher margin opportunities within its core residential mortgage and retail savings business.
Under the plans Bradford & Bingley has agreed to sell its housing association loan book to Dexia, Belgium's third-largest financial-services company.
The company confirmed the loan book comprises of £2.2 billion of assets, which contributed approximately £21 million to Bradford & Bingley's profits in 2006.
Meanwhile the lender's commercial loans portfolio is being sold to GE Real Estate for £2 billion – representing a small discount to the book's value.
Bradford & Bingley, which confirmed it would retain around £800 million of commercial property assets following the sale, said the portfolio of assets contributed around £26 million to group profits last year.
Commenting on the planned sales, Bradford & Bingley group chief executive Steven Crawshaw said: "These disposals are a natural step in the development of Bradford & Bingley's strategy.
"The £4.2 billion proceeds will enable us to improve returns by redirecting capital and funding resources to take advantage of the significant opportunities that exist in the UK mortgage market today," he added.
Bradford & Bingley said its plans were expected to produce a loss on disposal within the range of £15 million to £40 million.
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