US banking giant tipped as suitor to €2bn in Anglo loans
Published 11/12/2012 | 05:00
US banking giant Bank of America Merrill Lynch has been tipped as a potential buyer of €2bn of loans from Irish Bank Resolution Corporation (IBRC), but only if the state-owned bank will sell the assets.
A spokeswoman for IBRC, formerly Anglo Irish Bank, said no decision had yet been taken on whether or not to put the assets up for sale. The loan portfolio is understood to be mainly made up of company loans, rather than real estate.
Bank of America Merrill Lynch has been among the most active buyers of European loans over the past year, snapping up €7.4bn of assets this year, including a €300m portfolio acquired from AIB and loans from French, UK, Spanish, German and Italian banks.
The US bank's latest interest in Irish loans comes after IBRC hired UBS to conduct a strategic review of the assets in October.
The UBS review is not yet completed, according to the bank, but the Swiss bank's mandate is to look at the quality of the loans, assess potential interest among investors, and design a process to sell down the assets, if the bank opts to liquidate the portfolio.
Everything that IBRC owns ultimately must be sold by 2020, when the bank is due to be wound down, but executives at the bank are free to determine the timing of individual disposals.
Earlier this year IBRC executives blamed a lack of bank financing for slow going in terms of selling Irish and UK assets at attractive prices.
Department of Finance official Neil Ryan, himself a former banker with UBS, was seconded into the state-owned bank to aid the sales process in September.
Sales of loan portfolios are now a major feature of the banking landscape.
Stressed lenders are selling off books of loans to raise capital to shore up balance sheets, even in cases where it means crystallising losses on bad loans.
British-owned Lloyds Bank has set the bar for aggressive sales, after accepting a price of just 10 cent in the euro for €1.8bn of Irish property loans sold to US investors in November.
The Lloyds loans had originally been advanced to around 30 property developers by Halifax and Bank of Scotland ( HBOS) and were shifted into Lloyds when the partially nationalised UK bank took control of HBOS.
Lloyds has exited the Irish market, and analysts say that it was willing to take lower prices on loans than most remaining Irish lenders.