The Lloyds Banking Group has sold off a portfolio of bad property loans to American private equity firm Cerberus Global Investments for the amount of GBP325 million or US$504 million. This is the latest move for the state backed bank to purge its balance sheet of bad debts.
The price tag has a 38% discount on the face value of the loans according to the bank.
Lloyds and RBS, both British banks, have been divesting their portfolios of bad property loans in the past few years. The move is to clean up the financial issues brought about by the reckless abandon that lead up to the financial crisis in 2007,
According to Lloyds Chief Executive Officer Antonio Horta-Osorio, the bank is strengthening its balance sheet witht he sale of the assets and cutting down of costs. The bank is also closing overseas units in order focus on United Kingdom business as a precondition to the GBP20 million bailout fund during the 2008 banking crisis.
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