LONDON, UK: As previously announced as part of its Strategic Transformation Programme, AIB Group plc confirms that its subsidiary AIB Group (UK) p.l.c. (AIB UK) has reached an agreement to sell c. £0.6bn of performing small and medium enterprise (SME) loans in Great Britain (GB) to Allica Bank Limited following a competitive sales process.
AIB UK will receive cash consideration of approximately £0.6bn(1). The proceeds will be used for general corporate purposes. As at June 2021, the loan portfolio had a gross carrying value of c. £0.6bn and risk-weighted assets (RWA) of c. £0.4bn. The sale is expected to be marginally accretive to capital. In the year ended 31 December 2020, the loan portfolio incurred a loss before tax of c. £9m.
Subject to approvals, migration will be on a phased basis with the process expected to commence in 2021 and complete over 2022.
This transaction enables AIB UK to reduce both its staff numbers and property footprint and assists in the achievement of c. €35m cost savings, thereby marking another significant step in the implementation of AIB Group strategy and the commitment to reduce costs by €230m by 2023.
Following the exit from the GB SME sector, AIB UK will focus on growing its Corporate Banking business to companies in its chosen segments, including renewables, infrastructure, real estate, healthcare and manufacturing sectors.
AIB UK will now contact impacted customers to inform them that their loans are being transferred. www.aib.ie