By Joe Hoppe

 

Permanent TSB Group Holdings PLC said Tuesday that it has agreed to sell a portfolio of performing property loan accounts to a U.K. branch of Citigroup Inc, for around 1.2 billion euros ($1.42 billion) on completion.

The Dublin-listed lender said the portfolio, a pool of 3,700 buy-to-let loan accounts linked to around 3,400 borrowing relationships, had a gross balance sheet value of EUR1.4 billion, and a net book value of EUR1.2 billion. In 2019, it generated gross interest income of around EUR15 million and an operating profit of around EUR2 million.

All loans originated as loans secured on buy-to-let properties, largely consist of interest-only repayment terms, have an average balance of around EUR375,000 and an average remaining term of 10 years. The portfolio will continue to be serviced by Permanent TSB for six months, before transferring the title. After completion, Citibank NA London will syndicate the portfolio via securitization.

"This transaction will increase the Bank's transitional Total Capital Ratio by 2.1%, strengthen the balance sheet and provide us with resources to compete in our core markets of personal mortgages, personal lending and SME lending," said Chief Executive Eamonn Crowley.

 

Write to Joe Hoppe at joseph.hoppe@wsj.com

 

(END) Dow Jones Newswires

October 27, 2020 04:06 ET (08:06 GMT)

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