Carval subsidiary netted €4.7m profit in 2016 from Irish property loans

Part of US fund Carval earned almost €4.7 million profit in 2016 from Irish property loans it bought from UK bank Lloyds, the latest figures show.

Carval paid €348 million in 2014 for a share of Project Parasol, a group of about 2,000 small business loans and buy-to-let mortgages, from Lloyds which acquired the debts when it took over Bank of Scotland.

Accounts just filed with the companies' registrar show Pentire Property Finance, the Carval subsidiary that bought the loans, earned €4.68 million in profits after tax in 2016.

The figures show that Pentire collected €119.3 million on the debts. Its pre-tax profit was €6.245 million and it paid €1.56 million to the Revenue.

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Pentire paid for the Lloyds loans using money borrowed from its parent and from Credit Suisse.

At the end of 2016, it owed Credit Suisse €136.8 million. The company’s liability to its immediate parent, Pentire Property Finance Holdings, also part of Carval, was €83.8 million. Pentire’s net assets at the end of the year were €5.3 million.

Carval is one of a number of such funds that took over bubble-era property loans in the Republic from banks and the State assets agency Nama.

While these firms bought the debts for considerably less than the amounts actually due, the deals still entitled them to collect all the cash that was owed or take control of the properties against which they were secured.

Pentire, along with other so-called vulture fund subsidiaries, has been pursuing borrowers through the courts.