Investec: Irish mortgages sold to US equity firm

INVESTEC has sold £540 million (R9.7 billion) of Irish mortgages to US private equity firm Lone Star, marking its second deal this month to get rid of loans it no longer wants. Investec said yesterday that it was selling its Irish home loan business, Start Mortgage, and some other Irish mortgage assets to an affiliate of Lone Star Funds. It said the deal was part of its plan to simplify and reshape its banking business. This follows the sale last week of its UK mortgage business, Kensington, for £180m to Blackstone and TPG. Investec has been dogged by a sharp fall in property prices in Ireland, and has been forced to take substantial impairment charges there. Investec said the business being sold had gross assets of £540m and about 70 employees, and made a pretax loss of £21m in the year to March. The sale of the Irish loan book would have a marginal negative impact on capital ratios but its common equity tier 1 ratio would improve to 11.1 percent from 8.8 percent on a pro forma basis as of March. Investec Limited shares fell 0.89 percent to R98.51 yesterday. – Reuters