Lloyds Banking Group Plc agreed to sell European real estate loans for about 1 billion euros ($1.4 billion) to an affiliate of private-equity fund Cerberus Institutional Partners V LP as the bank disposes of non-essential assets.
The loans have a value of 1.1 billion pounds ($1.8 billion), Lloyds, the U.K.’s largest mortgage lender, said in a statement today. The sale won’t have a material impact on the bank, though it technically will add to capital under Basel III rules, it said.
Banks and other European lenders are selling real estate loan books and shares in property companies as they repair balance sheets damaged by losses and try to conform with new regulations. Lloyds is preparing to sell its stake in closely-held U.K. homebuilder Keepmoat Ltd. in a deal that may value the company at 600 million pounds, two people familiar with the matter said earlier today.
The sale to the Cerberus private equity fund is expected to be completed by the end of the year.