Royal Bank of Scotland will raise £1.1bn from the sale of a portfolio of Irish real estate loans to hedge fund Cerberus Capital Management.
The distressed assets generated losses equal to £800m for RBS in 2013, primarily due to impairment, and the lender now says it will use the sale proceeds for general corporate purposes.
An RBS statement said the sale was “part of the continued reduction of assets in its RBS Capital Resolution division and is in line with the bank’s plan to strengthen its capital position and reduce higher risk exposures”.
US hedge fund Cerberus’ real estate platform specialises in “structuring and monetizing real estate investments in distressed debt”.
Cerberus also announced today that it had acquired a £1.2bn portfolio of commercial property loans from National Australia Bank, the owner of the UK’s Clydesdale and Yorkshire banks.
RBS announced the sale shortly after it was revealed it had only narrowly passed the Bank of England’s stringent new stress test.