July 27, 2014 / 10:58 PM / 3 years ago

Australia's NAB sells $1 billion UK property loan portfolio

MELBOURNE (Reuters) - National Australia Bank Ltd has agreed to sell a 625 million pound ($1.06 billion) portfolio of mostly non-performing UK commercial property loans to private equity firm Cerberus Global Investors.

NAB said on Monday the sale would generate a small gain on net book value would release about 127 million pounds in capital for the group, which owns the Clydesdale and Yorkshire Banks in the United Kingdom.

The UK business has been a drag on the Australian company’s earnings for many years.

The sale will cut NAB’s gross loans balance in its UK commercial real estate portfolio by a fifth to 2.38 billion pounds and cut gross impaired loans by nearly half.

Reporting by Sonali Paul; Editing by Sandra Maler

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