Lloyds sells distressed Irish loans at 90% discount

By GARETH MACKIE
Published on 19/11/2012 15:28

Lloyds Banking Group has agreed to sell a portfolio of Irish commercial real estate loans for a tenth of their face value.

The bank, which is 40 per cent owned by the taxpayer, said US private equity firm Apollo Global Management will pay £149 million in cash for the loans, which were valued at £1.47 billion.

However, the group said the sale of the portfolio – which generated losses of £202m last year – is not expected to have a material impact on its finances because it has already made “significant impairment provisions” against it.

The bank added: “This transaction is in line with the group’s strategy of de-risking its balance sheet and reducing its non-core assets.”

It said the provisions were “higher than the average across the Irish wholesale book because of the particularly distressed nature of these assets”. Proceeds from the sale, which is expected to be completed in the first quarter of next year, will be used for general corporate purposes, the bank added.