UK lender Lloyds has agreed to divest its EUR1.1bn portfolio of 4,000 non-performing Irish residential mortgages to American private equity firm Lone Star Funds.
The sale comes as part of the bank’s strategy to deleverage its balance sheet by reducing non-core assets.
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The deal includes a portfolio of around 4,000 loans, which were called Project Paris by Lloyds.
Lloyds sold more than £900m of mortgage-backed loans to Lone Star Funds at the end of 2011 for a discount of up to 40%.
As of 30 June 2014, Lloyds’s Irish operation was heavily making losses and had £13.4bn (16.8bn) of Irish loans, a decrease from £29.1bn in December 2009.
Last month, South African bank Investec has agreed to sell its Irish sub-prime mortgage business Start Mortgages to American private equity firm Lone Star Funds to simplify and reshape its banking business.
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By GlobalDataLloyd’s spokesman in London Ian Kitts said: "In general our non-core asset disposals involve assets where we have already largely provisioned for impairments, and we continue to expect non-core reductions in aggregate to be capital accretive."
