€800m problem loan sale marks final act for former ACC

0
2

€800m problem loan sale marks final act for former ACC


Rabobank’s HQ in the Netherlands. Photo: Bloomberg
Rabobank’s HQ in the Netherlands. Photo: Bloomberg

Rabobank has agreed to sell its remaining stock of Irish loans to distressed debt investors Goldman Sachs, CarVal and Cabot for €800m.

The sale of the ACC Loan Management debt will draw a line under the nine-decades-old ACC brand, originally set up in 1927 to provide credit to Irish farmers.

The loans are a mix of residential mortgages, farm loans, business and property debt, and have been sold at a steep discount.

The bank declined to say what the face value of the loans sold is but their valuation had been written down below €800m by the bank itself. The most recent accounts filed by ACC Loan Management for 2016 show it had €3.2bn of loans on its books at the end of that year, which had been written down to a valuation of €1.32bn.

Calculated by face value, there was €2.4bn of commercial debt and €783m of residential lending.

The accounts said 25pc of the debt was linked to farming and fisheries and 25pc to real estate and construction.

A significant minority of the residential mortgages at that point were classed as performing, along with a small minority of the commercial debt. Many performing borrowers are likely to have refinanced with alternative lenders over the past two years.

Day-to-day management of the loans was outsourced to Capita in 2016.

Rabobank bought the former State-owned Agricultural Credit Corporation (ACC) Bank in 2002.

It largely pulled out of the Irish market after the crash but retains a corporate banking operation here focused on the food industry.

The Dutch bank said yesterday it had agreed to sell its portfolio of secured Irish loans in ACC Loan Management (ACC) to a consortium of Goldman Sachs and CarVal. An unsecured loan portfolio is being sold to debt collector Cabot.

}
});

#bb-iawr-inarticle- { clear: both; margin: 0 0 15px; }

Affected customers will be notified by letter of the sale and provided details of the buyer of their loans.

Meanwhile, KBC Bank Ireland has sold a roughly €260m portfolio of performing commercial loans to Bank of Ireland.

The sale of good loans will have a negligible impact on KBC’s balance sheet.

KBC pulled out of commercial lending here after the crash to focus on its retail and micro, small and medium segments. Bank of Ireland has been keen to grow its loan book and remains focused on the sector.

KBC said it will contact borrowers involved to inform them that their loans are being transferred, and to confirm that their legal and regulatory protections remain in place.

Bank of Ireland shares were up over 5pc in Dublin yesterday afternoon.

Irish Independent

LEAVE A REPLY

Please enter your comment!
Please enter your name here