FINANCE: Bank of Cyprus Group has confirmed the sale of its £289m UK loan portfolio to Oaktree Capital backed-Mars Capital Finance and Camael Mortgages.
The bank said that “the purchasers were selected as the successful bidders through a competitive process”.
It confirmed that the nominal value of the book – which was largely residential loans – was £289m.
It is understood that residential loan servicer, Mars Capital Finance, is a wholly owned subsidiary of Mars Capital Holdings, which is majority owned by its management; funds are managed by Oaktree Capital Management.
The portfolio was put up for sale in April, advised by HSBC, and comprises loans against more than 500 properties within greater London, the majority of which are to individual, wealthy residential owners, although there are some office and hotel elements in the portfolio.
It included performing and non-performing loans.
The portfolio was part of a wider UK loan portfolio transferred to the group after its acquisition of now-defunct Laiki Bank in March 2013 and was not related to Bank of Cyprus UK, the group’s wholly owned subsidiary.
Bank of Cyprus was at the centre of the country’s economic crisis last year and was forced to convert its own depositors’ cash into equity to recapitalise in early 2013.
The process, known as a “bail-in”, was a condition of international lenders the IMF and the EU for Cyprus to receive a €10bn bailout.
Bank of Cyprus Group said: “The sale of this loan portfolio is in line with the group’s restructuring plan and is part of the group’s strategy of deleveraging through the disposal of non-core operations and of focusing on core businesses while, at the same time, strengthening its capital and liquidity position.”
It added that the transaction will enhance the group’s liquidity and will have a small positive impact on the group’s Common Equity Tier 1 capital.
bridget.oconnell@estatesgazette.com
