18th May 2018 08:20
LONDON (Alliance News) - FTSE 100-listed Lloyds Banking Group PLC said on Friday it has agreed to sell its Irish residential mortgage portfolio to Barclays Bank PLC, part of Barclays PLC, for GBP4.00 billion.
The deal is expected to generate 25 basis points of Common Equity Tier 1 capital for Lloyds, which it said is slightly better than originally expected. It will be completed in the second half of 2018. The sale proceeds will be used for general corporate purposes, the bank said.
However, Lloyds will incur a GBP110.0 million one-off pretax loss as a result of the transaction to be recognized in its first half results.
The gross assets being transferred are GBP4.3 billion, of which GBP0.3 billion are impaired, and they generated a pretax loss of GBP40 million in 2017.
The sale is in line with Lloyds's plan to become more low-risk and UK focused, it said. It will have minimal exposure to Ireland after the transaction. Its total outstanding run-off portfolio will be GBP4.00 billion, which constitutes less then 1.0% of the group's loans and advances to customers.
Shares in Lloyds Banking were up 0.1% at 66.29 pence on Friday. Barclays shares were up 0.2% at 209.50p.
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