AIB Group PLC agreed to sell a nonperforming loan portfolio to Everyday Finance DAC as part of a consortium arrangement with the Irish credit management firm and affiliates of U.S.-based Cerberus Capital Management LP.
AIB will receive a cash consideration of approximately €800 million upon completion of the transaction, which is expected to be capital-accretive for the Irish banking group. Proceeds from the sale will form part of the group's ongoing liquidity management, it said May 17.
The NPL portfolio had a gross balance sheet value of €1.1 billion as of March 31, representing risk-weighted assets of €800 million. The portfolio incurred a €1.1 million loss in 2017.
As of March 31, AIB has reduced its nonperforming exposures to €9.2 billion from €31 billion in 2013. The group said it remains on track to reach normalized NPE levels by the end of 2019.
Goldman Sachs Group Inc. and private equity firm Lone Star were previously reported to be also vying for the NPL portfolio.
AIB Group is the listed holding company of Allied Irish Banks PLC.
