Lloyds to sell off Irish loans

Lloyds Banking Group plans to sell about €2bn of mainly Irish property loans, the latest phase in extricating itself from Western Europe’s biggest property crash, according to a source with knowledge of the transaction.

The UK’s second biggest government-aided bank may have to take discounts on the sale, said the source, who declined to be identified because details of the sale are private. Ian Kitts, a Lloyds spokesman, declined to comment.

Lloyds moved in 2010 to close and run down the Irish unit it acquired two years earlier as part of its takeover of HBOS. The bank has taken £11.8bn (€14.9bn) of impairment charges on Irish loans since the country’s property market collapsed four years ago. That equates to 40% of its end-2008 Irish loan book.

Two years ago, Lloyds largely handed management of its Irish portfolio to Certus, a company set up by members of its former Irish management team. Lloyds said in July its exposure to Ireland is “being closely managed, with a dedicated UK-based business support team in place to manage the winding down of the book”.

Some 86% of Lloyds’ £16.1bn Irish wholesale portfolio, mainly commercial real estate loans, was impaired at the end of June, the group said on Jul 26.

Lloyds said in July it sold £300m of gross Irish wholesale assets during the first six months without giving further details.

Bloomberg