National Australia Bank has sold a portfolio of largely non-performing UK commercial real estate loans to Cerberus Global Investors for £625 million (€789 million; $1.1 billion), the bank confirmed in a statement on Tuesday.
Cerberus has been an extremely active participant in the market for loan portfolios over the last 12 months. Deals include the acquisition of almost €1 billion of consumer and personal loans from UniCredit in December, and a large portfolio of real estate debt from Irish ‘bad bank’ NAMA in April this year.
The deal represents “a substantial de-risking of the [UK commercial real estate] portfolio, reducing the gross loans balance by 20 percent to £2.38 billion as at 30 June, and reducing gross impaired loans by 48 percent.”
Andrew Thorburn, the incoming chief executive of NAB Group, said: “We’ve progressively reduced our exposure to UK commercial property loans through organic run-off. This sale represents a substantial de-risking of the non-performing portion of the NAB UK CRE portfolio.”
The deal resulted in a small gain above net book value and will release an estimated £127 million of capital to the NAB Group on completion.
Analysts predict the improving UK economy and appetite from investment groups such as Cerberus for distressed or non-performing loan books will enable to NAB to offload the remainder of its UK CRE portfolio within 12 months.
If you do not receive this within five minutes, please try to sign in again. If the problem persists, please email: