The Royal Bank of Scotland Group (RBS) has agreed to sell a portfolio of loans to an entity funded by Deutsche Bank and alternative investment specialist Apollo Global Management.
At completion, RBS will receive a cash consideration of about £400m at current exchange rates. Completion is expected in September 2015.
The sale is expected to generate a profit of around £24m, after costs, which will be used for general corporate purposes
This transaction, which represents risk-weighted assets equivalent to £679m, as at December 31 2014, is part of a continued reduction of assets in RBS Capital Resolution.
RBS said it is in line with the bank’s plan to strengthen its capital position and reduce higher risk exposures.
The value of the loans as at December 31 2014 was around £376m.
The gross assets were about £1.137bn and the loans generated a loss of roughly £70m in the year to December 31 2014.
RBS has sold a separate portfolio of loans in its Capital Resolution busines, to Cerberus Cerberus Capital Management, in a deal that will net the group £225m in cash.
The value of the loans as at December 31 2014 was around £223m.
The gross assets were rounghly £549m and the loans generated a loss in the region of £17m in the year to December 31 2014.
The disposal is expected to generate a profit of £1m after costs.
By Marcel LeGouais