Lloyds’ loans set for €300m buyout

US investment firm Kennedy Wilson is being heavily linked with a bid in the region of €300m for the Irish loan portfolio of Lloyds Banking Group.

The company — part of the five-strong consortium which invested in Bank of Ireland earlier this year, thus cutting the Government’s stake in Bank of Ireland from 42% to 15% — has been active in the Irish market in recent months.

In August, Kennedy snapped up the Brooklawn House office block in Ballsbridge, Dublin 4.

Perhaps more significantly, it also recently bought a €360m tranche of non-performing Irish property loans from Lloyds.

However, Lloyds was yesterday downplaying reports — which surfaced over the weekend — that it is closing in on a sale of its €1.9bn Irish loan portfolio, with Kennedy Wilson the favourite to buy it.

It is thought that the portfolio could be sold at an 85% discount with bids of €300m expected.

Lloyds — which acquired Halfax/Bank of Scotland in 2009 — has been open about its plans to exit Ireland, and wind down and deleverage its Irish book since the end of 2010.

In August of last year it signed an agreement with Green Properties for it to manage certain commercial property assets for Lloyds.

Lloyds has taken a €14bn impairment hit on its Irish loans since the meltdown of the property market here.

It has consistently said that its exposure to Ireland through its Irish portfolio — made up of residential mortgages, development land, and commercial property loans — is being closely managed.

A spokesperson for the group yesterday refused to comment on media speculation, but said that the business remains focused on winding down the Irish business “via a range of measures”.