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Bank of Ireland sells bad loan portfolio

Bank of Ireland Group Plc agreed to sell a portfolio of nonperforming exposures mainly secured on buy-to-let investment properties to Promontoria 2019 – SGA DAC, an affiliate of U.S.-based Cerberus Capital Management LP.

Upon completion, the bank will receive a consideration of roughly €150 million for the sale of the portfolio, which has a gross book value of approximately €250 million as of June 30.

Following the deal, Bank of Ireland's NPE ratio will drop to below 5%.

Proceeds from the sale will be used for general corporate purposes. The bank said the deal will lead to a marginal increase in its common equity Tier 1 ratio, while its net interest income will drop by around €3 million on an annualized basis.