Lloyds Banking Group has agreed to sell 4,000 non-performing Irish mortgage loans to Lone Star Funds, according to two people with knowledge of the matter. 

The bank is selling the assets, known as Project Paris, at a discount to its €1.1 billion face value, the sources told the Bloomberg news agency. They declined to give further details. 

"Lloyds has long stated it's deleveraging its balance sheet and will do this by reducing its non-core assets - this
includes its Republic of Ireland book," Ian Kitts, a spokesman, said in an e-mailed response to questions from Bloomberg. 

The bank does not comment on individual transactions that do not require stock-market announcements, he said. 

Lone Star, based in Dallas, has emerged as a buyer of Irish property assets being sold in the wake of the country's vast property crash. 

Lenders such as the now-defunct Anglo Irish Bank are being wound up and foreign-owned banks such as London-based Lloyds are running down their Irish loan books. 

Lloyds had £13.4 billion of Irish loans at the end of June, down from £29.1 billion in December 2009, according to company reports.

After handing back its local banking license in 2010, Lloyds is continuing to extricatie itself from Ireland. 

"In general our non-core asset disposals involve assets where we have already largely provisioned for impairments, and we continue to expect non-core reductions in aggregate to be capital accretive," Kitts said in the e-mail. 

About 17% of Lloyds's Irish consumer loan book was impaired at the end of June, while 95% of its commercial
property and 88% of its corporate loans were in similar trouble, according to its first-half report.