It has since announced plans to sell about €5 billion in “non-core assets”, including 50% of Capital Home Loans’ UK mortgage book to US private equity firm Cerberus Capital LP.
The loan amounts total €3.5 billion and the sale is expected to close by the end of July. The bank has also agreed to sell its CHL legal entity and loan-servicing platform to Cerberus.
The CHL Loan Portfolio is comprised mostly of performing, well-collateralised UK buy-to-let loans (predominantly tracker mortgages), accounting for around 95% of the Group's Non-Core UK book.
CHL has been closed for new lending since 2008 and has around €6.5 billion of assets within the portfolio as at 31 December 2014.
The Group intends to raise a total €525m from private investors and will use €400m of this to repurchase Contingent Capital held by the State, marking "the first stage in returning the Group to private ownership”, according to chief executive Jeremy Masding.
He added:
"The sale of these non-core loans is a key objective for the Group and it will allow us to concentrate on our core retail banking business in Ireland. Completion of the three transactions announced today will mean that we will have completed over 50% of our total deleveraging target for non-core loans; this is well ahead of schedule."
