Bank of Ireland meets troika divestment target

Bank of Ireland became the first Irish bank to meet its divestment target set under the country’s bailout from the EU and IMF yesterday by completing sales of €10bn worth of loans 18 months ahead of schedule.

Bank of Ireland, the only Irish bank to escape majority state ownership after the bursting of a property bubble brought the sector to the brink of collapse, said sales throughout the second quarter had brought total divestments to date to €10.3bn.

Sales were €300m above target and achieved at a weighted average discount of 7.9%, which analysts said was well within expectations.

The bank said yesterday it had sold its British infrastructure project finance loan book, which encompasses undrawn commitments of around €270m, to Danish pension fund PensionDenmark. PensionDenmark paid a price at around 83.5% of these commitments.

Bank of Ireland, which last week appointed billionaire US investor Wilbur Ross to its board, said it expects to complete the rest of its deleveraging plan, which involves running down its loan book to around €90bn, by the deadline of the end of 2013.

Irish banks, which have been heavily recapitalised after huge losses throughout the financial crisis, have to cut their combined balance sheets by €70bn by running down or selling loans as part of the sector-wide deleveraging plan.

Meanwhile, AIB’s efforts to deleverage are ahead of schedule, chairman David Hodgkinson said yesterday.

The bank said in March it had met 62% of a €20.5bn deleveraging target at end 2011.

— Reuters