More than €1.4bn worth of Ulster Bank loans are to be sold to a US vulture fund.
The bank confirmed it had agreed the sale of 5,200 non-performing mortgage loans to Cerberus Capital Management.
The portfolio includes about 2,300 residential loans and around 2,900 buy-to-let mortgages.
A bank spokeswoman said: “Ulster Bank can now confirm that it has agreed terms for the sale of a portfolio of non-performing mortgages of c 1.4 billion euro, as announced for sale in May to a purchaser managed by affiliates of Cerberus Capital Management LP.
“This portfolio does not contain any performing home loans or any home loans in an arrangement.
“This difficult decision comes a decade after the financial crisis began and the continued extension of forbearance cannot be maintained.
“Not all mortgages are sustainable and we are obliged to reduce the level of non-performing loans on our balance sheet.
“For mortgages that are not sustainable, additional forbearance will not bring them back to a performing position.”
Ulster Bank said it would be contacting affected customers and giving 90 days’ notice of the sale instead of the 60 days it was required to provide.
Fianna Fail finance spokesman Michael McGrath criticised the sale.
“The net effect of the transaction remains that another bank is outsourcing its dirty work to a US vulture fund,” Mr McGrath said.
“What tools does Cerberus have at its disposal for dealing with these loans that Ulster Bank doesn’t have?
“The bottom line here is the banks and the Government are simply washing their hands of the problem.”
The opposition TD said it was hard to see many of these mortgage holders managing to negotiate a restructuring solution with the bank and that Ulster Bank needed to clarify whether the mortgages were being purchased by a regulated or unregulated entity.
Sinn Fein TD David Cullinane said the raft of loan sales by banks during the Dail recess showed “they have the implicit acceptance of Government”.
Mr Cullinane claimed a “banks-first” policy had been adopted by Finance Minister Paschal Donohue in line with his predecessor Michael Noonan.
“While Ulster Bank say no performing loans are included, this does not exclude the possibility that mortgages meeting their restructuring arrangement are included – this must be clarified immediately,” he said.
“Without political direction this summer will be remembered as the Summer of the Vultures.”
- Press Association