Lloyds Banking Group has agreed to sell 4,000 non-performing Irish mortgage loans to Lone Star Funds, a US investment company, according to sources.

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.

Lloyds Banking Group has signed an agreement with BDL Ireland Management that may allow the company to manage hotels tied to the bank’s €1bn of Irish lodging loans, according to two people with knowledge of the matter.