RBS sells £1.6bn of Irish real estate loans

Royal Bank of Scotland’s troubled Ulster Bank brand has sold a portfolio of poorly performing Irish real estate loans for £360m.
Private equity firm Lone Star Funds and a subsidiary of Cairn Homes bought the assets.

The portfolio has gross assets of £1.6bn and the sale will cut £700m from RBS’ total risk-weighted assets – the crucial measure of the size of the risks a bank has taken, which determines how much capital it must hold.
RBS took a major hit on its Irish assets in the credit crunch, as house prices fell by as much as 50pc.
As a result, the carrying value of this sizeable portfolio on the bank’s balance sheet was just £115m. The sale means it should book a gain of around £245m in its fourth quarter financial results.

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