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Lloyds to sell Irish residential mortgage book to Barclays for £4B

Lloyds Banking Group PLC agreed to sell its portfolio of Irish residential mortgages to Barclays PLC unit Barclays Bank PLC for a cash consideration of about £4 billion at current exchange rates.

The gross assets under the deal amount to about £4.3 billion, about £300 million of which are impaired. The assets incurred a pretax loss of about £40 million in 2017, Lloyds said.

The deal, which will be completed in the second half, will incur a pretax loss on sale for Lloyds of about £110 million, to be reflected in its first-half results. It will generate about 25 basis points of common equity Tier 1 capital upon completion.

Lloyds said the sale is in line with its strategy of becoming a low-risk, U.K.-focused bank, adding that it will have minimal exposure to Ireland after the deal and its total outstanding run-off portfolio will stand at around £4 billion.

The proceeds from the sale will be used for general corporate purposes, Lloyds added.