30th Jul 2015 06:41
LONDON (Alliance News) - Lloyds Banking Group PLC Thursday said it has agreed to sell a portfolio of Irish commercial loans to a consortium consisting of Goldman Sachs, CarVal Investors and Bank of Ireland for about GBP827 million, with the group's remaining exposure to commercial assets in Ireland to be minimal following the deal.
Lloyds said the sale includes GBP2.6 billion in assets, with GBP2.3 billion of that amount considered to be impaired. In 2014, the loans generated a GBP130 million pretax loss.
The sale proceeds will boost the bank's capital levels by about seven basis points, Lloyds said, with the proceeds to be used for general corporate purposes.
"The sale is in line with the group's strategy of deleveraging its balance sheet by reducing run off assets and creating a low-risk, UK-focused bank," Lloyds said in a statement.
At the end of June, the group's impaired loans as a percentage of closing advances were 2.7%, and provisions as a percentage of impaired loans were 55.1%.
"On a pro-forma basis, the impact of this sale would be to reduce the impaired loans as a percentage of closing advances to 2.2% and reduce provisions as a percentage of impaired loans to 48.3%," the bank said.
CarVal Investors is a US-based alternative investment manager focused on distressed and credit-intensive assets and market inefficiencies.
By Samuel Agini; [email protected]; @samuelagini
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