RBS to sell loan portfolio for £400m

The Royal Bank of Scotland Group has announced it is selling a portfolio of loans to an entity funded by Deutsche Bank and Apollo Global Management for £400m (€570m).

The loans are part of Project Finn, which is made up of commercial real estate in Ireland.

Completion is expected in September 2015 and the disposal proceeds are set to be used for general corporate purposes.

This transaction forms part of the continued reduction of assets in RBS Capital Resolution and is in line with the Bank’s plan to strengthen its capital position and reduce higher risk exposures.

The carrying value of the loans as at 31 December 2014 was around £376m, while the gross assets were approximately £1.137bn and the loans generated a loss of approximately £70m in the year to 31 December 2014.

The disposal of the portfolio is expected to generate a profit of approximately £24m after costs associated with the transaction.