RBS sells toxic loan book

GOVERNMENT-backed Royal Bank of Scotland agreed a deal to offload a £1.4bn portfolio of toxic commercial property loans to US private equity giant Blackstone yesterday.

City A.M. understands RBS will work with Blackstone to manage the package of property loans following the sale, which will remove the assets from its balance sheet.

Blackstone will take a 25 per cent stake in the portfolio under the deal, while RBS will hold the remainder but sell it down over time.

The deal is the largest such sell-off of its kind and follows speculation that either Blackstone or Lone Star would be chosen to partner RBS.

The move is part of RBS’s efforts to return its balance sheet to health and follows other sales of non-core assets such as international subsidiaries, or recently a portfolio of Spanish commercial property loans.

Both RBS and Blackstone declined to comment.