Bank of Ireland sells off €1.4bn in non-performing loans

For Bank of Ireland, the disposals mean its exposure to soured loans will fall to 3.7% from 5.4%, it said. 

Bank of Ireland has sold off two groups of soured homeowner and landlord loans worth €1.4bn, further reducing its exposure to bad loans.     

The first deal, in Ireland, involves CarVal and Mars Capital and means the bank will sell €800m of non-performing mortgage loans belonging to homeowners and landlords, along with a small amount of other non-home loans. 

CarVal will fund the purchase and credit servicing firm Mars, after an interval, will manage the loans for borrowers. 

Bank of Ireland also said it is disposing of a further €600m of non-performing UK mortgage loans, but in this instance by way of securitisation. 

That means the bank will continue to service the loans directly for customers. 

For Bank of Ireland, the disposals mean its exposure to soured loans will fall to 3.7% from 5.4%, it said.

A large amount of Irish distressed mortgages are now owned or managed by foreign non-bank entities or vulture funds, a legacy of the way banks and the Central Bank regulators here managed the fallout of the loan loans after the financial crash a decade ago. 

Meanwhile, the Government has said that it has cut its stake in AIB to 57% and has plans to sell off more of its shareholding next year. 

It sold the last of its shares in Bank of Ireland in September.