AIB Group PLC AIB - Sale of non performing loan portfolio (3511O)
May 17 2018 - 2:01AM
UK Regulatory
TIDMAIBG
RNS Number : 3511O
AIB Group PLC
17 May 2018
EMBARGO 07:00 17 May 2018
AIB Group plc - SALE oF NON PERFORMING LOAN PORTFOLIO
AIB Group plc ("AIB") has agreed to sell a non performing loan
portfolio to Everyday Finance DAC ("Everyday") as part of a
consortium arrangement with Everyday and affiliates of Cerberus
Capital Management. This is another important step in our non
performing exposure (NPE) deleveraging strategy and we remain on
track to reach normalised NPE levels by end 2019.
At 31 March 2018, the loan portfolio had a gross balance sheet
value of EUR1.1 billion which represented risk weighted assets of
EUR0.8 billion. In the year to December 2017, this loan portfolio
incurred a loss of EUR1.1 million.
At completion, AIB will receive cash consideration of EUR0.8
billion and the proceeds will form part of ongoing liquidity
management. The conclusion of the transaction will be capital
accretive.
***
Further information:
AIB has reduced NPEs from EUR31 billion in 2013 to EUR9.2
billion at 31 March 2018 and this will reduce further by EUR1.1
billion following this transaction. 95% of the reduction in NPEs
has been achieved through case by case restructuring and working
with customers to rightsize sustainable debt based on customer
affordability. To date we have implemented over 90,000 solutions
including over 40,000 private dwelling houses (PDH) solutions which
involved significant debt write-off. AIB continues to engage with
customers in arrears to reach solutions which now includes an
Enhanced Mortgage to Rent option.
AIB is committed to reducing NPEs to a level more in line with
European norms as per regulatory guidelines. We continue to have
c.1,500 people working with customers who are in difficulty across
the country and our preference remains to provide solutions on a
case by case basis.
Transaction details:
-- The portfolio is characterised by levels of deep long term
arrears with c.90% over 2 years in arrears and c.70% over 5 years
in arrears, reflecting a lack of sustained and meaningful
engagement and/or debt sustainability.
-- The portfolio is underpinned by investment asset properties
and excludes private dwelling houses and family farm homes.
-- Consisting of c.800 customer connections, the average balance
per customer connection is EUR1.4 million. This extends across
c.3,700 assets. Typically each customer connection is made up of a
number of related borrowers, loans and underlying collateral.
-- The portfolio excludes performing restructured customer connections.
-- AIB continued to restructure connections during the sales
process. This, along with significant engagement and business as
usual activity, led to a c.EUR400 million reduction of potentially
in-scope customer connections.
-- The buyer, Everyday Finance DAC, is regulated by Central Bank of Ireland.
AIB will now contact impacted borrowers to inform them that
their loans are being transferred, and to confirm existing legal
and regulatory protections remain in place.
-ENDS-
This announcement contains inside information.
For further information, please contact:
Niamh Hore / Janet McConkey Stephen O'Shea / Paddy McDonnell
Investor Relations Media Relations
AIB Bankcentre AIB Bankcentre
Dublin Dublin
Tel: +353-1-6411817 / +353-1-6418974 Tel: +353-1-7720456 / +353-1-6412869
email: niamh.a.hore@aib.ie email: stephen.p.o'shea@aib.ie
janet.e.mcconkey@aib.ie paddy.x.mcdonnell@aib.ie
Forward Looking Statements
This announcement contains certain forward-looking statements
with respect to the financial condition, results of operations and
business of AIB Group and certain of the plans and objectives of
the Group. These forward-looking statements can be identified by
the fact that they do not relate only to historical or current
facts. Forward-looking statements sometimes use words such as
'aim', 'anticipate', 'target', ' expect', 'estimate', 'intend',
'plan', 'goal', 'believe', 'may', 'could', 'will', 'seek',
'continue', 'should', 'assume', or other words of similar meaning.
Examples of forward-looking statements include, among others,
statements regarding the Group's future financial position, capital
structure, Government shareholding in the Group, income growth,
loan losses, business strategy, projected costs, capital ratios,
estimates of capital expenditures, and plans and objectives for
future operations. Because such statements are inherently subject
to risks and uncertainties, actual results may differ materially
from those expressed or implied by such forward-looking
information. By their nature, forward-looking statements involve
risk and uncertainty because they relate to events and depend on
circumstances that will occur in the future. There are a number of
factors that could cause actual results and developments to differ
materially from those expressed or implied by these forward-looking
statements. These are set out in the 'Principal risks and
uncertainties' on pages 58 to 68 of the Annual Financial Report
2017. In addition to matters relating to the Group's business,
future performance will be impacted by Irish, UK and wider European
and global economic and financial market considerations. Any
forward-looking statements made by or on behalf of the Group speak
only as of the date they are made. The Group cautions that the list
of important factors on pages 58 to 68 of the Annual Financial
Report 2017 is not exhaustive. Investors and others should
carefully consider the foregoing factors and other uncertainties
and events when making an investment decision based on any
forward-looking statement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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