Lloyd's sells €1.1bn of bad bank to Lone Star

Billy Ehrenberg
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Lloyds has jettisoned €1.1bn (£883m) of bad bank.
Lloyds Banking Group, which is partly owned by the UK government, has sold its Irish residential home loans to Lone Star, a US private equity group.
Lloyds's Irish operation was heavily loss-making and, according to the FT, had £13.4bn of Irish loans left in its non-core division at the end of June.
In a statement the bank said:
Lloyds Banking Group has long stated that it is deleveraging its balance sheet and will do this by reducing its non-core assets This includes its Republic of Ireland book, having announced its exit from the country and wind down of its book in 2010.
Whilst we will not comment on individual transactions where there is no obligation to formally announce to the stock market, we can state that - in general - our non-core asset disposals involve assets where we have already largely provisioned for impairments and we continue to expect non-core reductions in aggregate to be capital accretive.
Lone Star has bought several mortgage portfolio packages recently, as house prices in Ireland recover.

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