RBS looking to offload £15 billion of property assets a year
As the long-term goal of unwinding Royal Bank of Scotland's distressed loan book continues the company has revealed plans to offload upwards of £15 billion of property assets a year for the foreseeable future. The company will also be tailing off the vast majority of property loans in the UK and Europe which will unwind the company's loan book going forward, although there are fears of more write-offs in the short to medium term.
There is growing concern about the state of the Irish economy and the significant exposure which companies such as Royal Bank of Scotland have in this area. Ireland has for many months been mentioned as a possible bailout case for the European Union although so far it has managed to drag itself from the bottom of the economic cycle. However, any collapse in the Irish economy would likely lead to further problems within Europe which would obviously impact on companies such as Royal Bank of Scotland and Lloyds Bank in particular.
It is believed there is around £228 billion of property debt outstanding in the UK with estimates that £50 billion of this total may be "distressed". Despite the fact that Royal Bank of Scotland and Lloyds Bank would appear to be on a much firmer financial footing there may be more challenges ahead.
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