BoI raises €470m in loans' sale to Sumitomo Mitsui group
Bank of Ireland is selling a portfolio of loans to the Sumitomo Mitsui Banking Corporation for €470m.
The loans, which relate to infrastructure and energy projects in North America and Europe, were sold at a 15pc discount to the €590m they were originally valued at.
The sale is part of the bank's efforts to sell off valuable assets to raise money to meet its debts under the terms of the International Monetary Fund/European Union bailout programme.
Bank of Ireland will use the money from the sale to reduce its dependency on loans from the Central Bank and the European Central Bank.
The bank said yesterday it was continuing to make good progress on sales of other loan portfolios.
It has to sell €10bn worth of loans and repay another €20bn by the end of 2013. Bank of Ireland said the sale was within the scale of discounts assumed in the stress tests carried out on the Irish banks.
These loans were sold at a heftier discount than the 11pc it got for the €570m worth of loans in another portfolio it sold earlier this year.
In a note, Goodbody Stockbrokers said it assumed Bank of Ireland would take a 15pc discount for its remaining €4bn-€5bn non-core portfolio.
AIB, by comparison, is facing a haircut of between 25pc and 30pc on the assets it is being forced to sell, according to the broker. The bank has already sold over half the €10bn worth of assets it is required to shed within the next couple of years.