:BANK OF Ireland has agreed the sale of about €5 billion of loans that it has deemed non-core – about half of the targeted total in the non-core division to be disposed of by 2013 – at a discount of 9 per cent of their face value.
The bank said the transactions would have “no adverse impact” on its capital reserves and a “neutral impact” on the lender’s core tier one capital ratio.
Total proceeds from the disposal of about €5 billion in assets amounted to €4.54 billion, the bank said in a statement.
The capital losses on the disposals were lower than the discounts assumed in the Central Bank capital and liquidity stress tests in March, the bank said.
The bank recently sold $1.13 billion (€814 million) of US commercial property loans to the American bank Wells Fargo and said that the price received for the assets reflected the high quality of the portfolio.
A further £1.33 billion (€1.5 billion) of UK commercial property loans were sold to US company Kennedy Wilson, which has invested directly in Bank of Ireland, and institutional partners.
The price paid to the bank was £1.07 billion – a discount of 19 per cent to the face value of the loans.
The bank has agreed to sell about £1.23 billion of UK residential mortgages to The Mortgage Works, a subsidiary of Nationwide Building Society in the UK, for a price of £1.13 billion – a discount of 8 per cent on their face value.
Bank of Ireland said it had agreed to sell a portfolio of project finance loans with commitments of about €670 million to a buyer, GE Energy Financial Services, for about 92 per cent of their value.
The price paid represents about 89 per cent of the €570 million drawn down for renewable energy assets in North America, the UK, Europe and the Middle East.
A further €700 million of UK corporate banking loans have been reduced “at or close to” their face value, the bank said.
Bank of Ireland is also in “advanced discussions” with potential buyers of assets at its UK specialist lender Burdale and other project finance loans.
Richie Boucher, chief executive of Bank of Ireland, has said that the lender, the only bank to avoid State control, plans to deleverage by disposing of or running down about €30 billion in assets.
This comprises €20 billion in customer repayments and redemptions and a further €10 billion on the bank’s non-core loan portfolios.Irish banks are deleveraging their balance sheets by €73 billion to wean themselves off cheap funding from the European and Irish central banks and return to self-sufficiency by the end of 2013.
Bank of Ireland is 15 per cent State-owned and has received €4.2 billion in capital from the Government, not €5.7 billion as was reported in yesterday’s edition.
