Business Irish

Thursday 18 January 2018

BoI closer to Central Bank target after sale of €200m UK portfolio

Donal O'Donovan

Donal O'Donovan

Bank of Ireland's sale of a €200m portfolio of UK business loans brings the partially state-owned bank close to meeting its target to shed €10bn of assets set by the Central Bank.

Yesterday, the bank agreed to sell its Infrastructure Project Finance loans to Aviva Special PFI LP, a fund linked to the Aviva insurance giant.

The loans were sold at a price of 81 cents in the euro, to bring in €162m for the bank.

Bank of Ireland was told to sell €10bn by the end of 2013 following a Central Bank review -- dubbed the 2011 Prudential Capital Assessment Review.

The latest sale means the disposal programme is close to completion -- with €9.7bn of the loans sold since March 2011, including the latest deal.

That tally does not include any Irish loans, which are seen as "core" by the bank and the Central Bank.

The largest disposals were of €1.5bn of UK commercial property loans and €1.4m of UK home loans.

Slimmed

"Non-core" asset sales have seen all of the bailed-out banks slimmed down in recent months; last week AIB sold its Asset Management unit that manages investments for pensions and charities to South Africa's Prescient.

Last month AIB hired Morgan Stanley to sell a property loan portfolio worth €675m, primarily backed by Irish offices.

AIB disposed of €12.7bn in "non-core assets" in 2011, out of €20bn targeted for sale.

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