IBRC to sell off €2bn loan portfolio

The former Anglo Irish Bank, Irish Bank Resolution Corporation, is considering selling a loan portfolio of up to €2bn as part of its push to wind up operations by 2020.

The move follows a series of portfolio sales by crisis-hit eurozone lenders looking to rid themselves of low-price loans after high funding costs made it too expensive to hold onto them.

IBRC’s portfolio consists of around €2bn of corporate loans, according to sources.

UBS has been mandated to assess the quality of the loans, investors’ appetite for them, and the options available to IBRC if it opts to sell them.

The portfolio is likely to be split up before being sold off to end investors. UBS was chosen after a number of banks tendered in a public procurement process, the sources said.

The portfolio of debt could increase to include real estate loans.

IBRC and UBS declined to comment.

IBRC was formed in Sep 2011 after Anglo Irish Bank, which had been nationalised in Jan 2009, merged with Irish Nationwide Building Society in Jul 2011 following a joint restructuring plan approved by the European Commission.

Irish Nationwide had many residential mortgages which are now part of IBRC, while most of Anglo’s personal and corporate deposit accounts were transferred to AIB.

IBRC’s total assets as of Jun 30 amounted to €53.2bn.

Since nationalisation, IBRC has been focused on asset recovery and the management and reduction of its loan books, predominantly in Ireland and the UK. It has already sold its Scottish loan book and is well advanced in the sale of its US loan book.

“We have focused our entire organisation on the orderly work-out of the bank’s loan books over time,” IBRC said.

“Our goal is to achieve full resolution of the bank by 2020.”

Portfolio sales have raised hundreds of billions of euro for cash-strapped lenders, starting with UK banks Royal Bank of Scotland and Lloyds in 2010, followed by Portuguese, Greek, and Irish banks in early 2011, when high funding costs made it too expensive to hold low-priced loans.

UK and Irish banks have continued to sell down their debt.

Lloyds alone managed to sell or work out around £23bn (€28.5bn) of loans in the first half of 2012 and a total of £53bn in 2011.

Bank of Ireland mandated Deutsche Bank to sell a €3bn portfolio of assets in 2011 and earlier this year AIB sold a €300m-equivalent portfolio of loans to Bank of America Merrill Lynch.

Reuters

© Irish Examiner Ltd. All rights reserved

Irish Examiner live news app for smartphones lets you quickly access breaking news, sport, business, entertainment and weather. appstoregoogle play
Irish Examiner ePaper app gives you the entire newspaper delivered to your phone or tablet for as little as 55c a day. epaper
Home

More From The Irish Examiner