The Bank of Ireland announced it has agreed to sell Burdale to Wells Fargo Bank. Headquartered in London, Burdale is a provider of asset-based lending to the UK market. In recent years, it has also established a presence in North America from its base in Stamford, CT.

The transaction will be effected by way of a sale of the entire issued share capital of Burdale Financial Holdings Limited (BFHL), the UK entity, to Wells Fargo International Banking Corporation (WFIBC) and a sale by Burdale Capital Finance (BCF), the U.S. entity, of its loan book to Wells Fargo Bank.

In the year ended December 31, 2010, BFHL generated profit before tax of £20.7 million. As of December 31, 2010, BFHL’s gross assets amounted to £352 million and BCF’s gross assets amounted to £242 million.

Under the terms of the transaction, the Bank will incur an aggregate discount of circa £4.7 million on the combined net asset value of BFHL and the net asset value of the BCF loan book at completion. This discount equates to circa 0.4% of Burdale’s total loan commitments of circa £1,318 million as of November 30, 2011 and to circa 0.8% of Burdale’s total drawn balances of circa £575 million at the same date.

Upon completion, WFIBC will satisfy any indebtedness owed by BFHL to the Bank. The total cash proceeds, including the repayment of inter-company indebtedness, of circa €690 million (before taking account of transaction and related costs) will further reduce the Bank’s wholesale borrowings including those from Monetary Authorities in line with the Bank’s deleveraging plan. In addition, from a capital ratio perspective, this sale will not adversely impact the Group’s Core Tier 1 ratio.

As announced as part of the 2011 Prudential Capital Adequacy Review (“PCAR”) on March 31, 2011, the Group envisages reducing the size of its loan book from €114 billion at December 31, 2010 to circa €90 billion at December, 31 2013. As part of this deleveraging, the Group plans to divest €10 billion of certain loan portfolios/lending businesses.