AIB has sold a portfolio of underperforming loans to a consortium led by Everyday Finance for €700m in cash.

The bank said the portfolio, which has a book value of €850m, covers loans relating to around 2,800 assets held by 1,000 customers.

It consists largely of investment properties; including loans for buy-to-let properties, commercial real estate and land and development.

However it is understood that some owner-occupier mortgages and agricultural loans may be included in the sale, in some cases where private assets were used as security against an investment loan.

AIB said three quarters of the loans non-performing over two or more years, while half were non-performing for more than five years.

Alongside Everyday Finance, which is part of London-based Link Financial Group, the acquiring consortium also includes affiliates of Cerberus Capital Management. 

AIB said the proceeds of the sale would be used for general business purposes and was part of its ongoing strategy to reduce its non-performing loan exposure to 5% of its loan book by the end of the year.

The bank said it would now contact impacted borrowers to inform them of the sale.