Cerberus, the New York distressed-debt giant, is among bidders vying to take over a potential sale of a portfolio of AIB non-performing loans, including debt that had soured during the Covid-19 pandemic and never recovered, sources say.
Lone Star, another big US acquirer of Irish loan portfolios over the past dozen years, also had a look at the AIB portfolio, dubbed Project Fir, but is no longer in the running, sources also say.
Loans in Project Fir had an original value of €500 million as the sale was being prepared earlier this year, including mortgages, unsecured loans and small business loans.
It is likely that the par, or face, value of the loans has since declined as a number of borrowers moved to refinance or redeem borrowings before a sale.
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The portfolio is on track to be sold at a steep discount to its par value.
Cerberus has typically used loan servicing firm Everyday Finance, part of Link Group, to manage loans acquired in Ireland in the past six years.
Industry sources say the winning bidder for Project Fir, which may be selected as soon as the end of next month, is likely to bring in a debt collection agency to deal with the unsecured personal loans element of the portfolio.
Asked about Project Fir, a spokesman for AIB declined to comment specifically on the sale, but he said: “AIB has reduced its non-performing exposure [NPE] levels from €31 billion in 2013 to €2 billion, or circa 2.8 per cent of gross loans, as of end June 2025.
“For customers in difficulty, our focus has been to put in place appropriate and sustainable solutions to help them to get back on track.
“The bank’s preference is to provide solutions through customer engagement on a case-by-case basis.
“AIB continues to support customers through a comprehensive range of forbearance solutions and we have done so in over 150,000 cases.
“Notwithstanding the considerable progress made to date, we remain committed to maintaining an NPE level which is in line with European norms.”
The sale comes almost two years after AIB shifted most of its remaining crisis-era problem loans and it signals that portfolio sales will remain a tool for the bank’s management of intractable non-performing loans. Cerberus acquired that portfolio and retained Everyday Finance to manage the loans.
European regulators introduced rules a decade after the financial crash requiring banks to set aside provisions equal to 100 per cent of a non-performing loan within three to seven years after the default date. That incentivises banks to address such borrowings or get them off their books.
AIB booked a net loan loss charge of €85 million for the first half of this year, up from €61 million for the year-earlier period, it said in August.
Minister for Finance Paschal Donohoe sold the State’s remaining 2 per cent stake in AIB for €305.3 million in June, bringing the total recovered to date from the bank to €19.8 billion.
