LONDON (Reuters) - UK Asset Resolution, the British 'bad bank' set up to manage the assets of two failed lenders, has sold two portfolios of residential mortgages to an investor group led by Barclays, boosting the public purse by 5.3 billion pounds.

The sale of around 45,000 Bradford & Bingley and Mortgage Express housing loans is expected to complete within the next few weeks, the company said in a statement on Thursday.

The 5.3 billion pounds sum includes the final 4.7 billion pounds repayment of a 15.65 billion pounds Financial Services Compensation Scheme (FSCS) loan extended to Bradford & Bingley when it was nationalised in 2008.

"This marks a significant moment in B&B's history with all 15.65 billion pounds returned to the FSCS and ultimately the taxpayer," Ian Hares, Chief Executive Officer of UKAR said in a statement.

"When complete, this sale will reduce UKAR's balance sheet to 14.5 billion, an 87 percent reduction since its formation."

Equity funding for the acquisition was provided by Pimco, while a finance package in the form of a commitment to buy investment grade bonds has been structured by a consortium comprising Barclays, HSBC, Lloyds, Nationwide, NatWest Bank and Santander UK.

(Reporting By Sinead Cruise, editing by Carolyn Cohn)