Lloyds Banking Group has agreed to sell its Irish residential mortgage portfolio to Barclays Bank for £4bn at current exchange rates.
The deal will mean Lloyds will have reduced its exposure in Ireland to “minimal” levels, in line with its strategy of becoming a “low risk, UK focused bank”.
The £4.3bn of assets, of which £0.3bn are impaired, generated a pre-tax loss of c.£40m in the year to 31 December 2017.
Lloyds said the deal will generate approximately 25 basis points of CET1 capital – the amount required to be held for Basel III requirements – upon completion in the second half of 2018, alongside a pre-tax loss of £110m recognised in the first half results.
Lloyds said its total outstanding run-off portfolio will be around £4bn, less than 1% of the its loans and advances to customers.
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