June 4 State-backed Lloyds Banking Group Plc
said it would sell a book of UK commercial real estate
loans to U.S. hedge fund Cerberus for 352 million pounds
($589.72 million), a 34 percent discount to their gross value.
The move makes Lloyds the latest European lender to offload
non-core loans onto a private equity firm.
Lloyds said the loans had a gross value of 536 million
pounds and were being sold to Promontoria Holding 109 B.V., an
affiliate of Cerberus Global Investors.
The portfolio generated a 17 million pound loss last year,
Europe's banks have been selling loans to shrink balance
sheets that were bloated during the run up to the financial
crisis. Many have restructured and separated businesses and
loans they no longer want.
The Lloyds deal is part of an ongoing reduction of the
bank's balance sheet since its taxpayer rescue during the
financial crisis. It is not expected to have a material impact
on the group.
In November, Lloyds sold a 1 billion euro ($1.36 billion)
portfolio of commercial real estate loans to Cerberus at a 21
percent discount to their nominal value.
Germany's Commerzbank and Italy's UniCredit
also offloaded loans this year in a bid to clean up
balance sheets and free up capital ahead of European banking
($1 = 0.5969 British pounds)
($1 = 0.7341 euros)
(Reporting by Richa Naidu in Bangalore; editing by Andrew Hay)