Economy Goldman-led group buys 1.6 billion stg of UK loans from Barclays

Goldman-led group buys 1.6 billion stg of UK loans from Barclays

British bank Barclays Plc
British bank Barclays Plc

British bank Barclays Plc <BARC.L> has sold a 1.6 billion pound ($2.4 billion) portfolio of UK loans to a group of investors led by U.S. investment bank Goldman Sachs Group Inc <GS.N>.

The loans are part of 110 billion pounds of assets Barclays has designated as “non-core”, which it no longer wants and intends to sell or run down.

Barclays’ non-core assets, which also include loans in continental Europe and assets held by its investment banking arm, had been cut to 57 billion pounds by the end of June, and the bank aims to reduce the total to about 20 billion by the end of 2017.

The latest portfolio sold are “second charge” loans, where a second loan is secured against a home, often to raise money instead of remortgaging. Barclays inherited the loans from its purchase of Woolwich in 2003.

Barclays said the loans, which had a notional value of 1.6 billion pounds, or 1.2 billion on a risk-adjusted basis, will have a positive impact on its core capital ratio.

The group of buyers was led by Goldman and also included Elderbridge, which buys and administers loans and is part of servicing and software firm Target Group, and UK private equity firm Pollen Street Capital.