Spain's Popular sells life insurance portfolio-source

MADRID, July 12 Fri Jul 12, 2013 5:24am EDT

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MADRID, July 12 (Reuters) - Spain's Banco Popular will book a 21-million-euro ($27.4 million) profit from the sale of the life insurance portfolio of its Pastor Vida arm, a source with knowledge of the deal said on Friday.

Popular is shedding assets to boost its capital and return to profit after reporting massive losses last year when the government forced crippled lenders to book provisions to cover bad investments made during a decade-long property boom.

The portfolio will be sold for 50 million euros ($65.2 million) to the jointly held Allianz-Popular group and the deal will boost the lender's core capital, a measure of solvency, by 45 million euros, the source said.

Allianz Popular, 60 percent owned by Europe's biggest insurer Allianz, will takes on Popular's life and risk insurance portfolios as well as pension funds as part of the deal, the source also said.

Popular declined to comment.

($1 = 0.7668 euros) (Reporting by Paul Day; Editing by Julien Toyer and Mark Potter)

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