The deal will increase Bradford & Bingley's managed assets

The UK firm will buy the mortgage portfolios from GMAC-RFC, a UK-based lender owned by the US auto group.

The deal is the third with GMAC-RFC, following the acquisition of a number of similar loan portfolios by B&B, worth �3.1bn, since 2002.

B&B will make the latest acquisition in four tranches, but the bank did not say how much it was paying.

Each tranche will contain loans worth at least �50m, up to a combined maximum total of �1.4bn.

The deal will increase Bradford & Bingley's managed assets, which stood at �35.8bn on June 30, by up to 3.9%.

"The assets will be acquired by Mortgage Express, a wholly owned subsidiary of Bradford & Bingley, and will be funded from the group's existing resources," the bank said in a statement.