RBS to sell off loss-making Irish real estate loans
Royal Bank of Scotland has announced plans to sell off a portfolio of loss-making Irish real estate loans.
Its Ulster Bank unit has agreed to sell £1.63bn of loans to housebuilder Cairn Homes and an affiliate of global private equity firm Lone Star Funds.
The bank will make about £360m from the sale, which is expected to be completed by the end of this year.
RBS said the deal was part of its plan to strengthen its capital position and reduce its exposure to risk.
Proceeds from the sale of the portfolio will be used for "general corporate purposes".
The carrying value of the loans as at the end of last year was about £115m. The loans generated a loss of about £28m over the year.
Last week, RBS and Standard Chartered were found to be the weakest of Britain's seven largest lenders in a Bank of England stress test.
The central bank said the two banks did not have enough capital strength.
However, as both had taken steps to raise capital, they were not told to come up with a new capital plan.
The stress test was carried out to measure whether the UK's biggest lenders would survive a financial shock.