Thursday 14 November 2019

AIB sells €850m of bad loans

AIB has sold €850m of bad loans
AIB has sold €850m of bad loans
Ellie Donnelly

Ellie Donnelly

The State-owned AIB has agreed to sell non-performing loans to the value of €850m.

The bank concluded the sale of so-called non-performing exposures to US fund Cerberus.

The portfolio consists of loans linked to over 1,000 customers and 2,800 assets.

The collateral is mainly buy-to-let and investment properties but includes a limited amount of farm land.

It is understood that in a small number of cases mortgage on borrowers' family homes is included because it is cross-secured to wider commercial connected debt.

The average debt among the borrowers is €900,000.

Around three out of four loans were not performing for over two years, while 50pc have not been performing for more than five years.

The loans were bought by Everyday Finance, an affiliate of Cerberus Capital Management, one of the most prolific investors in Irish distressed debt since the crash.

AIB, which is largely State-owned will receive €700m from the sale.

The bank, like all Irish lenders with big stocks of bad boom-era loans, is under pressure from European regulators to clean up its balance sheet fast.

AIB has reduced its non-performing loans from €31bn in 2013 to €4.7bn at 30 June this year.

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