Ulster Bank sells £261m of bad loans in the province

The Ulster Bank has sold a bad loans portfolio covering debts north and south of the border understood to have a face value of g2.5 billion to the vulture fund Cerberus.
Ulster Bank headquarters in BelfastUlster Bank headquarters in Belfast
Ulster Bank headquarters in Belfast

The vast majority of the loans, termed as distressed, belong in the Republic of Ireland, with around 12% based in Northern Ireland and valued at around £261 million.

Ulster Bank has confirmed the completion of a sale of significantly impaired loan portfolio, predominantly in the Republic of Ireland, enabling the bank to strengthen its balance sheet for the benefit of its customers,” said a statement from the bank.

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“The loans involved are all in Ulster Bank’s problem debt management unit and have been in arrears or under specialist management for a significant period of time. We will be in contact with all affected customers in the coming days to help them as their loans transition to their new owner.”

The sum includes around £22m in agricultural loans in the province, though the total portfolio is certain to be worth considerably less.

“We will be in contact with all affected customers in the coming days to help them as their loans transition to their new owner,” the bank added.

It is understood the existing rights, obligations and regulatory protections of the borrowers transfer with the loans.

Cerberus is the investment firm which bought the Project Eagle portfolio comprising the Republic’s bad bank NAMA’s Northern Ireland based loans for £1.3bn in 2014.