Business Irish

Friday 13 December 2019

Irish-based banks sell €28bn of loans so far this year

The headquarters of Ulster Bank in Dublin
The headquarters of Ulster Bank in Dublin
Donal O'Donovan

Donal O'Donovan

Banks here sold €28.5bn of loans in the first nine months of the year, up from €2bn in 2013 according to new research from PwC.

In the UK, banks sold €9bn of loans in the year to the end of September.

Ireland accounted for more than a third of the entire volume of European sales.

"The process will substantially probably be finished by the end of next year," according to David Tynan of PwC.

But the sales will continue at an elevated pace into 2015, Mr Tynan said.

His firm has advised on Irish sales, including €19bn of assets sold as part of the liquidation of IBRC.

Deals this year include loans sold by Nama, Ulster Bank and Lloyds.

Ulster Bank is in the process of selling its biggest ever portfolio of loans, the €6bn project Aran deal.

Nama still has a number of years to run as it sells off its loan assets.

The massive sale of loans has become controversial over the past year - because in some cases mortgages and business loans have been sold to unregulated buyers, mostly US private equity houses.

New York-based Blackstone Group and Cork-based developer Michael O'Flynn are locked in a legal battle after the US firm bought €1.8bn of O'Flynn Group loans from Nama and called in the debt.

The Department of Finance is currently examining potentially extending protection to consumers and SMEs when debts are sold.

The sell-off of loans will leave an altered banking landscape with fewer and smaller banks but new players including the listed property investment REITS, and investors such as Lone Star and Kennedy Wilson, according to David Tynan.

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