AIB sells its UK loan book for €713m

Exits from SME lending will aloow UK unit to focus on corporate banking

AIB said the move will save the bank €35m. File Picture: Artur Widak/NurPhoto

AIB has reached an agreement to sell its UK small business loan book for £600m (€713m) to Allica Bank.

In a statement, AIB said the proceeds of the sale will be used for general corporate purposes. Up to the end of 2020, the loan portfolio incurred a loss before tax of £9m (€10.7m).

Following the exit from the SME sector, AIB said its UK subsidiary will focus on growing its corporate banking business to companies in its chosen segments, including renewables, infrastructure, real estate, healthcare and manufacturing sectors.

"This transaction enables AIB UK to reduce both its staff numbers and property footprint and assists in the achievement of €35m cost savings, thereby marking another significant step in the implementation of AIB Group strategy and the commitment to reduce costs by €230m by 2023," the bank said.