Lloyds considers sale of Irish real estate loans

Lloyds Banking Group is reportedly mulling over of the sale of Irish real estate loans in an effort to pull itself out of Europe's property slump.

The London-based lender, which is 39% owned by the taxpayer, is considering the sale of about €650m of loans but will have to sell at a discount, a source told Bloomberg.

In 2010, Lloyds started to wind down and close the Irish arm it purchased two years earlier as part of a takeover of HBOS.

According to the bank's annual report, more than 90% of its £7.4bn commercial real estate loan book is impaired.

CarVal Investors LLC agreed to acquire €380m of Irish and UK property loans from the bank at about 25% of face value in November.

The same month, Lloyds also agreed to sell £1.5bn of Irish commercial real estate loans to Apollo Global Management LLC for 10% of face value.

The news comes after the bank announced it was cutting a total 8,550 jobs as part of a major restructuring.

Lloyds reported a loss for last year of £570m, down from £3.5bn in 2011, blaming a £3.5bn provision for mis-selling payment protection insurance.

The government has indicated it would sell-off its stake in the bank within months.

RD