As a result, the carrying value of this sizeable portfolio on the bank’s balance sheet was just £115m. The sale means it should book a gain of around £245m in its fourth quarter financial results. The deal also limits future costs for RBS as the portfolio lost £28m in 2014. Should the new owners sell the loans on at a substantial profit, they will pass some of those gains on to RBS. Ulster Bank was hit particularly hard by the financial crisis and the housing crash in Ireland and was one of the most troubled units in the bailed out RBS group. Last year, RBS considered selling or closing the Ulster Bank unit as it was still making heavy losses six years on from the group’s crash and bailout in 2008. But Ulster Bank made a surprise turnaround in 2014 and group chief executive Ross McEwan decided to keep the operations. The sale is the latest in a series of moves to cut the bank’s exposure to the Irish property market. A year ago RBS received £1.1bn when it sold a separate portfolio of Irish property loans to Cerberus, another private equity firm. RBS is also continuing to restructure other parts of the group. It plans to float off new retail bank Williams and Glyn next year, rebranding 316 branches across the country. The sale is designed to satisfy European Commission requirements that more competition is introduced into the banking market, as part of the regulators’ approval of the 2008 bailout.
The Royal Bank of Scotland 's ( RBS ) troubled Ulster banking unit plans to sell its loss - paying portfolio of Irish real estate loans at a 50 % discount , to a subsidiary of investment bank and an affiliate of Lone Star Funds ; the deal is expected to complete before the end of 2020 , and will see Ulster Bank receive about £ 360 m in cash at current exchange rates . This is in line with RBS 's plans to boost cash in order to shore up its balance sheet , as well as to move towards a less risky business model by scaling back its investment banking operations and focusing on UK retail and commercial banking .