Direct assignment

The outright sale of a pool of loans by one lender to another, usually a non-bank selling to a bank, with the seller continuing to service the loans.

It is simpler than a securitisation and achieves a similar result: the seller frees capital and books a gain, and the buyer acquires priority-sector or retail assets it could not originate itself.

The related co-lending arrangement has the two parties originate together, with the bank taking most of the exposure and the non-bank the customer relationship.

Income from these transactions is real and it is not the same as spread income from a loan held to maturity. Separate them before valuing the earnings.