KBC Bank Ireland signed a deal to sell about € 1.1 billion of non-performing mortgage portfolio to private equity fund CarVal Investors.
The bank said that after the completion of the deal, the loan will be managed by Pepper Finance Corporation (Ireland).
The portfolio consists of about 5,000 homes and mortgage lease purchases, as well as a small number of non-mortgage bad loans.
It represents “virtually all” of KBC Bank Ireland’s remaining NPL portfolio, the bank said in a statement.
Today’s deal follows the bank’s announcement in April that it is exploring options for selling its remaining non-performing mortgage portfolio and has begun negotiations with the Bank of Ireland to sell most of its Irish business.
Pepper, which is regulated by the central bank here, said that after the transfer of loans from KBC Bank Ireland, it will receive legal title to 5,000 mortgages.
After the sale, KBC Bank Ireland said customers will maintain the same legal and regulatory protections and Code of Conduct on Mortgage Delays.
KBC Bank Ireland said there are no immediate changes for customers and they do not need to take any action in connection with today’s announcement.
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The bank said that before closing the deal, KBC Bank Ireland will contact customers whose loan is included in the sale to inform them that their loan is being transferred.
“I am confident that the agreement we signed to sell virtually the entire remaining portfolio of non-performing mortgage loans, and with Pepper, the post-loan manager, offers a good and sustainable solution for our non-performing mortgage clients. – said the CEO of KBC Bank Ireland Ales Blazek.
“We can ensure that all clients whose loans are included in the transaction will continue to receive the same legal and regulatory protections. Pepper is a well-established player in the Irish market, ”he said.
“Affected customers will be contacted shortly about specific steps related to them,” added the bank’s CEO.
Cormac Ryan, CEO of Pepper Ireland, said the company is delighted to have been entrusted with a relationship with borrowers from KBC Bank Ireland.
“Our team is committed to working closely with clients who need support to provide them with long-term solutions tailored to their individual situations,” said Ryan.
“This new mandate is an excellent reflection of the reputation our team has built in recent years for the experience, capabilities, professionalism and quality of service we provide to mortgage clients,” he added.
Pepper said that as a result of the deal with KBC Bank Ireland, the total value of home loans, which he manages on behalf of investors and financial institutions, exceeded 12 billion euros.
85% of these loans are classified as current loans, totaling over € 19 billion.
The loan servicing company currently employs approximately 475 employees in offices in Shannon and Dublin.