Lloyds sells Irish mortgage book to Barclays for 4 billion pounds

Lloyds sells Irish mortgage book to Barclays for 4 billion pounds

Barclays has snapped up Lloyds Banking Group's remaining Irish mortgage portfolio for £4 billion (€4.6 billion) in a move that has prompted speculation that the assets will be refinance in bond markets, rather than herald a new entrant to the country's home loans market.

The deal covers gross assets of around 4.3 billion pounds, of which 300 million pounds are impaired, Lloyds said in a statement, and in the year to end-December they generated a pretax loss of around 40 million pounds.

This is the second Irish portfolio sale announcement this week, following AIB's €1.1bn non-performing loan sale announced yesterday, while earlier this week Permanent TSB announced that it was pulling over 4,000 split mortgages from its loan sale.

While it is substantially performing, it is a low-yielding European Central Bank tracker portfolio.

The deal will generate additional capital for London-based Lloyds, which will book a pretax loss of about 110 million pounds on the deal in its first-half earnings, the company said on Friday.

Lloyds has steadily reduced its presence in Ireland after the company was left with soured loans following the financial crisis. "However, the market for non-performing Irish loans is very much a buyer's one as the domestic banks struggle to achieve European non-performing loan targets".

Ulster Bank has also confirmed that a sales process is now underway for mortgages with a value of €1.6 billion.

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