RBS' Ulster Bank Units To Dispose Portfolio Of Irish Real Estate Loans

(RTTNews) - Royal Bank of Scotland Group plc (RBS, RBS.L) Monday announced that its subsidiaries, Ulster Bank Ireland Limited or UBIL and Ulster Bank Limited or UBL have entered into an agreement to dispose of a portfolio of Irish real estate loans.

The assets will be disposed to a subsidiary of Cairn Homes plc and an affiliate of Lone Star Funds.

At completion, UBIL and UBL will receive cash consideration of approximately 360 million pounds at current exchange rates. Completion is expected by the end of this year. The sale proceeds will be used for general corporate purposes.

The transaction is expected to generate a gain compared to carrying value of approximately 245 million pounds after associated costs, which will be recognised in fourth quarter.

The company noted that transaction, which represents RWA equivalent of about 700 million pounds as at 31 December 2014, is part of the continued reduction of assets in RBS Capital Resolution. The deal is in line with the bank's plan to strengthen its capital position and reduce higher risk exposures.

According to RBS, the carrying value of the loans as of December 31, 2014 was approximately 115 million pounds.