Goldman and Bank of Ireland team up to buy loans from Danske Bank
Bank of Ireland has joined up with Goldman Sachs and asset management group Pepper to buy a portfolio of loans from Danske Bank.
The portfolio, which has a par value of €540m, has been split with Bank of Ireland taking loans that were originally worth €274m.
The remaining €266m worth of debt has been taken over by Goldman Sachs and will be managed by Pepper, an Australian firm that set up in Ireland to work out loan books from the troubled banking sector here.
The loans are believed to cover a mix of commercial property, business and farming and are mostly focused on Ireland.
Bank of Ireland is understood to have acquired the performing part of the portfolio, while Goldman has taken on the distressed loans.
In a statement, Bank of Ireland said it expected the transaction to close "shortly".
"As part of the transaction, Bank of Ireland will acquire a €274m portfolio of performing commercial loans, comprising over 1,000 customers in the SME, agriculture and CRE sectors," the bank added.
Goldman meanwhile has bought the balance of the portfolio and has hired Pepper to service the book.
Pepper said it would would handle the day-to-day management of the loans including customer service and specialised case management where required.
Bank of Ireland's director of business banking in Ireland, Mark Cuningham, said the deal showed the bank's commitment to business banking in Ireland.
"Bank of Ireland is pleased to have been able to avail of this opportunity to demonstrate our ongoing focus on further growing and developing our strong position in serving the business and agri sectors in Ireland," Mr Cunningham said.
"We look forward to welcoming these new customers and working with them as they seek to develop and grow their own businesses and enterprises," he added.
Pepper Ireland chief Paul Doddrel said he was delighted to have taken on the loans.
"[The deal] sets us up for what will hopefully be our third consecutive year of strong growth and expansion in 2015.
"It also provides an opportunity to deepen our existing relationship with Goldman Sachs, and keep investing in the business," he added.
A Goldman Sachs spokesman declined to comment.