Mumbai: Troubled British bank Northern Rock Plc has sold 2.2 billion pound ($4.3 billion) of mortgage portfolio to US bank JP Morgan Chase & Co. to help it repay loans taken from the Bank of England.

The portfolio represents around 2 per cent of the company's total assets at the end of June 2007. 

Proceeds from the sale would be used to reduce Northern Rock's current funding from the Bank of England, the bank said.

The sale of home equity release mortgage assets will push down the bank's funding costs and should encourage buyers. The price, Northern Rock said, represents a premium of 2.25 per cent, or approximately 50 million pounds over the 2.2 billion balance sheet value.

The asset sale is Northern Rock's first since it was forced to borrow more than 25 billion pounds from the central bank.

Northern Rock, whose announcement of emergency aid on September 14 triggered a run on the UK bank the first time in more than a century.

Northern Rock, Britain's fifth-largest mortgage lender till the credit crunch in September, has time until mid-February to show how it will repay the debt.

Northern Rock, UK's highest profile casualty of the sub prime crisis, has since borrowed about 26 billion pounds from the central bank.

The government, which guaranteed the bank's deposits and said it would protect creditors, hopes to find a buyer for Northern Rock to repay the loans and revive the ailing business.

The bank's shareholders will meet on January 15 to decide whether to make investor approval mandatory for asset sales of 5 per cent or more.