Royal Bank of Scotland slashed £5bn (€5.8bn) from its non-core real estate loan book in the half year to the end of June as it continues to shrink its exposure to real estate.
The government-backed lender sold £3.6bn from its UK corporate loan book and made a £1.6bn reduction in its global banking markets division to bring its total non-core book from £47.7bn at the end of last year to £42.7bn at the half-year.
RBS’s non-core book reflects just over half of its total real estate lending portfolio of £84.6bn.
Within this division, the greatest reduction was in the UK corporate book, which came in from close to £11bn to £7.3bn, followed by the global banking markets reduced from £22.8bn to £21.2bn.
The US retail and commercial division was only marginally reduced by £245m to £1.15bn.
A statement from the bank said non-core “continues to make good progress” keeping up the momentum working through a £12bn pipeline of transactions signed but not completed last year.
“At the end of Q2 2011, £2bn remained to be completed from last year’s signed deals and the pipeline continues to build,” it added.
Impairments were £317m higher at £2.3bn in Q2 2011, driven principally by additional real estate charges, continuing difficulties in Ireland driven by development real estate values and impairments relating to a small number of large corporates.
The split of RBS’s £42.7bn non-core real estate lending portfolio now stands at £30.8bn investment and £11.9bn development property, down by £4.4bn and £556m respectively over the six-month period.
The most significant reductions came in investment UK property loans, which were down £2.8bn, while UK development loans were down £723m, and US investment loans shrunk by £1.1bn to £3bn.
