AIB is to sell its non performing loans (NPLs) to a consortium lead by Cerberus Capital.
Among those purchasing the loans at a discount rate is credit management company Everyday Finance, which is regulated by the Irish Central Bank.
“This is another important step in our non performing exposure (NPE) deleveraging strategy and we remain on track to reach normalised NPE levels by end 2019,” the bank said.
At 31 March 2018, AIB’s loan portfolio had a gross balance sheet value of €1.1bn, which represented risk weighted assets of €800m.
In the year to December 2017, this loan portfolio incurred a loss of €1.1m.
At completion, AIB will receive cash consideration of €800m from the sale, and the proceeds will form part of ongoing liquidity management, the bank said.
As at 31 March AIB had reduced its NPEs to €9.2bn from €31bn in 2013.
According to the bank, 95pc of the reduction in NPEs has been achieved through case by case restructuring and working with customers.
To-date the bank said that it has implemented over 90,000 solutions including over 40,000 private dwelling houses (PDH) solutions which involved significant debt write-off.
Founded in 1976 Everyday Finance describes itself as “the largest and most established credit management business in Ireland.”
The company is part of the Linked Finance Group, which operates in six countries managing over 2.5 million customer accounts and €25bn of receivables across its European platform.