Lloyds sells loan portfolio to Apollo at 90% discount

Lloyds Banking Group has announced the sale of a EUR 1.8 bn portfolio of Irish commercial real estate loans to Risali, an entity affiliated with Apollo Global Management. The transaction price amounts to £149 mln (EUR 185 mln) in cash, reflecting a nearly 90% discount to value.

'The transaction is not expected to have a material impact on the group due to the significant impairment provisions held against the portfolio, which are higher than the average across the Irish wholesale book because of the particularly distressed nature of these assets,' the bank said in a statement.

The portfolio, with a gross value of £1.46 bn (EUR 1.8 bn), generated losses of £202 mln in 2011.

The sale proceeds will be used for general corporate purposes, the bank said, adding that the deal is in line with the group's strategy of de-risking its balance sheet and reducing its non-core assets.

Closing is expected during the first quarter of 2013.