Bank of Ireland is to sell a portfolio of loans to Sumitomo Mitsui Banking Corporation for €470 million.

The bank said today it would sell the project finance loans at 85 per cent of their original loan value which was put at €590 million.

It said the loans related infrastructure and energy assets in North America and Europe.

The bank said the proceeds from the sale would reduce its funding dependency from the Central Bank and European Central Bank.

It said it continues to make good progress on sales of other non-core loan portfolios.

Bank of Ireland has to sell €10 billion in loans and accept repayment of another €20 billion by the end of 2013.

The bank said the discount taken on the sale to Sumitomo was within the base case discounts assumed in recent stress tests.

Goodbody Stockbrokers had assumed Bank of Ireland would take a 15 per cent discount for its remaining €4-€5 billion non-core portfolio. It expected Allied Irish Banks to take a haircut of 25-30 per cent on its asset sales.

However, the discount was larger than the 11 per cent haircut taken on the sale of a €570 million project finance portfolio in October.