HSBC sells $580 mln UK loan book to Cargill-led group

LONDON, March 1 Fri Mar 1, 2013 5:59am EST

LONDON, March 1 (Reuters) - HSBC has sold a 383 million pound ($580 million) portfolio of sub-prime UK loans to a consortium of investors led by the investment arm of U.S. food group Cargill.

Europe's biggest bank said on Friday it had sold the book of secured loans to Sancopia Portfolios, a Luxembourg-based group set up by a consortium of investors led by CarVal Investors.

The loans date back to HSBC's disastrous purchase of U.S. consumer loans firm Household Finance in 2003. HFC Bank, part of HSBC, ran a small branch network in Britain making loans to people who had credit difficulties, but HSBC closed it to new business in 2009 and has been running off the portfolio.

HSBC declined to say how much the loans were sold for.

The bank, which reports annual results on Monday, said the sale was part of its to slim down and become less risky. It is also running down its much larger book of U.S. sub-prime loans, and is looking to sell more than $6 billion of loans there to speed up the process.

CarVal Investors was founded by Minneapolis-based food group Cargill in 1987 as an arm of its proprietary, high-yield trading operation. It expanded to Europe, Asia and Latin America and in 2006 became an independent subsidiary of Cargill.

Its website said CarVal manages commercial credit and real estate investments, seeking opportunities in distressed assets and distressed markets.

CarVal did not immediately reply to a request for comment.

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

Find your dream retirement town

Florida? Hawaii? Reuters has teamed up with Zillow to give you the power to customize a list of your best places to retire.  Video | Full Article