Monday 10 December 2018

Goldman in the race for AIB bad loans

Goldman Sachs Group Inc. headquarters stands in New York
Goldman Sachs Group Inc. headquarters stands in New York

Gretchen Friemann and Peter Flanagan

AIB's sale of customer loans with a face value of €3.75bn is drawing interest from potential bidders including Goldman Sachs, according to a person familiar with the matter.

Goldman is carrying out due diligence on the portfolio known as Project Redwood as part of a potential joint bid, the source said.

Oaktree Capital, Apollo Global Management and Deutsche Bank are among other firms assessing the portfolio.

The Irish Independent reported last month that first-round bids for the loans are due by the end of January, and listed Oaktree, Cerberus, CorVal, Deutsche and Goldman Sachs as potential buyers but noted that the buyer must be, or include, a regulated entity, forcing debt funds and private equity houses to partner with domestic or international banks to qualify.

The sale is of a mix of impaired loans, including buy-to-let mortgages, SME loans, and revolving facilities as well as commercial real estate developments, construction loans and debts tied to land and residential developments. set to close before the end of June.

No owner occupier home loans are included.

The sale comes amid pressure on AIB to tackle its high level of bad loans, one of the highest among euro-area banks. AIB classed loans worth about €12bn as non-performing at the end of June, which amounts to about 19pc of its total gross loans.

The EU average is under 5.5pc, according to the European Central Bank.

AIB is focused on reducing impaired loans to closer normalised European peer levels, it said in an email response to a request for comment.

It's reviewing all options in relation to reducing impaired loans including further sales, the Dublin- based lender said. (Additional reporting Bloomberg)

Irish Independent

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