Royal Bank of Scotland Group PLC
7 December 2015
Disposal of a portfolio of Irish Real Estate Loans
The Royal Bank of Scotland Group plc (RBS) announces today that its subsidiaries, Ulster Bank Ireland Limited (UBIL) and Ulster Bank Limited (UBL) have entered into an agreement to dispose of a portfolio of Irish real estate loans to a subsidiary of Cairn Homes plc and an affiliate of Lone Star Funds.
At completion, UBIL and UBL will receive cash consideration of approximately £360m* at current exchange rates. Completion is expected by the end of this year. The sale proceeds will be used for general corporate purposes.
The transaction, which represents RWA equivalent of c.£700m as at 31 December 2014, is part of the continued reduction of assets in RBS Capital Resolution and is in line with the bank's plan to strengthen its capital position and reduce higher risk exposures.
The carrying value of the loans as at 31 December 2014 was approximately £115m. The gross assets were approximately £1.63bn and the loans generated a loss of approximately £28m in the year to 31 December 2014. The transaction is expected to generate a gain compared to carrying value of approximately £245m after associated costs, which will be recognised in Q4 2015.
For further information:
Investors
Richard O'Connor
Head of Investor Relations
+44 (0) 207 672 1758
Media
RBS Press Office
+44 (0) 131 523 4205
Ulster Bank Media Relations
+353 (0) 1 884 7032
* Under the terms of the sale agreement, further consideration will become payable where any of the subject assets are on-sold or otherwise transferred by the purchasers at or above certain agreed pricing thresholds within a specified period following completion.
FORWARD LOOKING STATEMENTS
This announcement contains forward looking statements with respect to the business, strategy and plans of RBS and its current goals and expectations relating to its future financial condition and performance. Statements that are not historical facts, including statements about RBS or RBS management's beliefs and expectations, are forward looking statements. By their nature, forward looking statements involve risk and uncertainty because they relate to future events and circumstances that will or may occur. RBS' actual future business, strategy, plans and/or results may differ materially from those expressed or implied in these forward looking statements as a result of a variety of factors. Please refer to the latest Annual Report on Form 20-F filed with the US Securities and Exchange Commission for a discussion of certain factors together with examples of forward looking statements. The forward looking statements contained in this announcement are made as at the date of this announcement, and RBS undertakes no obligation to update any of its forward looking statements.