Lloyds group cuts its Irish loan exposure by €2.5bn
Published 01/08/2014 | 02:30
UK lender Lloyds Banking Group said it has reduced its exposure to Ireland by just over £2bn (€2.5bn) in the first half of the year, as a result of disposals, write-offs and net repayments.
Lloyds Banking Group includes the old Halifax Bank of Scotland (Ireland) business that lent heavily into the mortgage and commercial property sectors here during the boom, before withdrawing from the Irish market and putting assets here in run-off.
In financial results for the first half of this year the bank said that the total stock of impaired Irish loans decreased by £1.3bn, or 14pc, to £8bn compared with £9.3bn at 31 December 2013. The bank's Irish commercial real estate portfolio is regarded as almost entirely "impaired" at 94.6pc.
In the mortgage market, Lloyds said its average Irish home loan is no longer in negative equity - the average indexed loan to value (LTV) at the end of June decreased to 99.1pc compared with 102.3pc at 31 December 2013.
Meanwhile, Kennedy Wilson Europe Real Estate has struck a deal to buy €120m of property assets in Ireland.
It will pay €44.5m for the Marshes shopping centre in Dundalk and €75m for the "Elliott" portfolio of loans secured against 13 properties including a retail park, apartment blocks and office buildings in Dublin that is being bought from RBS Capital Resolution - the 'bad bank' of Ulster Bank parent Royal Bank of Scotland.
It is a surprise, after the firm signalled in June that it is starting to move on from the Irish market to focus on southern Europe.