June 4 (Reuters) - 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, Lloyds said.
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 health checks. ($1 = 0.5969 British pounds) ($1 = 0.7341 euros) (Reporting by Richa Naidu in Bangalore; editing by Andrew Hay)