Bradford & Bingley is to speed up the repayment of an £18.4 billion loan by splitting its balance sheet into good and bad assets, it has been reported.

The part-nationalised bank, which has assets of around £50 billion, is seeking to sell attractive assets to private buyers.

The bank received the loan from the Financial Services Compensation Scheme (FSCS), and was closed to new business last September.

Although the Government paid the FSCS fee, the financial services industry must cover the sum over a period of time.

In an attempt to speed up repayment, the Times newspaper said B&B was looking to split off mortgages that are performing well or are low risk because they have a low loan-to-value ratio, which would be attractive to a buyer.

B&B recently announced its intention to turn itself into a mortgage services firm, in which it would manage mortgages for other banks. There are no plans for it to start lending again.

The group's savings business was sold to Abbey and Alliance & Leicester owner Santander a year ago.

The Treasury also plans to split Northern Rock into a good and bad bank so that the good part could be sold to a private buyer. Sir Richard Branson's Virgin Money, Tesco and private equity houses are likely to be interested.

The plan for Northern Rock is expected to receive the green light from the European Commission this week. However, European competition commissioner Neelie Kroes could impose restrictions on Northern Rock's ability to write new savings and loan business because of the state aid it has received.

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