Rabobank sells former ACC loans to Goldman, CarVal and Cabot

Deal marks Dutch group’s final exit from Irish retail banking

Rabobank-owned ACC was the smallest of Ireland’s 11 retail lenders before the crash, but its increased focus on commercial property lending during the boom landed it in trouble along with wider sector in 2008. Photograph: iStock

Rabobank-owned ACC was the smallest of Ireland’s 11 retail lenders before the crash, but its increased focus on commercial property lending during the boom landed it in trouble along with wider sector in 2008. Photograph: iStock

 

Dutch financial group Rabobank has sold the remaining loans of its former ACC Bank unit in Ireland to Wall Street investment bank Goldman Sachs, distressed debt firm CarVal Investors and debt collection firm Cabot for a deeply discounted price of €800 million.

The most recent set of available accounts for ACC Bank’s successor, ACC Loan Management, showed that the total portfolio amounted to €3.2 billion at the end of 2016 and that loan-loss provisions amounting to €1.88 billion had been set against the loans. That meant that the company expected to recover a little over 40 per cent of the total amount outstanding.

Rabobank said on Friday said that the group would make a “small” profit on the transaction. It added that its focus on agriculture and food supply lending was the driving force behind the sale. The Dutch group retains an Irish corporate banking operation which is focused on the Irish food sector.

Founded in 1927 as a state-owned lender called Agricultural Credit Corporation (ACC), it was acquired by Rabobank, the biggest mortgage lender in the Netherlands, in 2002.

ACC was the smallest of Ireland’s 11 retail lenders before the crash, but its increased focus on commercial property lending during the boom landed it in trouble along with wider sector in 2008.

The bank handed back its licence to the Central Bank in 2014 and was renamed as ACC Loan Management.

Foundations

Rabobank laid the foundations for the sale of the former ACC loans in the first half of last year as it moved the portfolio to its pool of “financial assets”. That meant that a decision had been taken at that stage not to hold the loans until they mature.

Rabobank returned its local banking licence to the Central Bank of Ireland in 2016 as part of a global initiative to reduce costs. Its corporate banking business was transferred to the Irish branch of the group.

In February last year, the group announced that it was shutting down its Irish online savings operation RaboDirect Ireland, with customers moving a combined €3 billion of deposits and savings by the end of May.

Goldman Sachs and CarVal are among a host of overseas firms that have snapped up portfolios of loans in the Republic in recent years, including loan books that were deep in arrears and assets that were being disposed of by lenders fleeing the market in the wake of the crash.

Lloyds Banking Group gave back its Bank of Scotland (Ireland) licence and Danske Bank retreated from the Irish retail lending market during the crisis.

Meanwhile, sources said earlier this year that ACC Loan Management had identified about 40 commercial and investment property customers who were charged the wrong rate, linked to European interbank lending rates. It identified the affected accounts as part of the Central Bank-directed review of boom-time lenders’ loan books for cases where borrowers were wrongly denied their rights to a tracker mortgage.