RBS to sell £3bn worth of property loans, reports claim

8 July 2010

The Royal Bank of Scotland (RBS) is to sell £3 billion worth of loans related to property as it continues its strategy to divulge itself of non-core business assets.

Lazard, a bank based in Edinburgh, is working with RBS on a strategy to sell sections of its real estate debt, the Financial Times reported.

Property assets account for more than a quarter of the total portfolio deemed to be non-core units.

The sale is part of the bank’s plan to sell off non-core divisions of its business after it was ordered to by the European Union.

Andrew Radkiewicz, managing director at Pramerica Real Estate Investor, told Reuters: “The interesting part of this portfolio is
whether it's the really distressed side of the loan book, the 'just a bit stressed' side, or the performing side.

“We suspect it's not the loan book that RBS wants to keep relations with for the long-term ... so this is veering more towards more complicated loans.”

RBS was one of the worst hit British banks during the global credit crisis during which it relied on state aid to stay afloat.

By Jim Ottewill

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