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AIB Group PLC on Tuesday said it will sell a non-performing loan portfolio to Irish credit manager Everyday Finance DAC for around €400 million in cash.
The portfolio includes multiple asset classes with an average time in default of nine years, and the sale is expected to resolve the Dublin-based bank's legacy, long-term default non-performing exposures.
Normalising NPEs is a priority for AIB, it said, in order to have a strong balance sheet and improved risk profile. As at December 31, the portfolio had a gross NPE value of €400 million and a risk-weighted assets position of €300 million.
Proceeds from the sale will be used by AIB for general corporate purposes, it said, including the continuation of support for customer restructuring.
‘Agreement of this transaction is an important milestone for AIB as it reduces the NPE ratio to well below 5%, resulting in a proforma NPE ratio of about 4.4% at [the end of the first quarter of] 2022. It demonstrates further progress as we move towards closing out legacy items this year while maintaining momentum in the delivery of our strategy,’ said Chief Executive Officer Colin Hunt.
Shares in AIB were up 3.8% at 216.80 pence on Tuesday in London.
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