RBS subsidiary Ulster Bank has agreed to sell a £1.63bn ($2.5 billion) portfolio of poorly performing Irish real estate loans to Lone Star Funds and homebuilder Cairn Homes.
The sale is part of the bank’s strategy plan to bolster its capital position and reduce higher risk exposures. The loans had a loss of about £28m in 2014.
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Following the completion of the deal, Ulster Bank Ireland Ltd. and Ulster Bank Ltd. will receive nearly £360m in cash at current exchange rates, a gain of about £245m compared with the book value, RBS said in a statement.
RBS added that the carrying value of the loans was approximately £115m as of 31 December 2014.
The deal, which is expected to be completed this year, will be split between the buyers, with Cairn contributing EUR378m of the cost, according to the Dublin-based Cairn Homes.
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