Macquarie Group, Bank of America and Metrics Credit Partners are believed to be lining up to purchase Investec’s $1bn loan portfolio.
It is understood that the process is heading to its final stages.
The portfolio is a mix of Australian leveraged finance and asset-backed loans.
It’s no surprise Macquarie and BoA are taking a look, given both have large balance sheets and hope to gain new business through an acquisition at an attractive return.
Metrics Credit Partners is an Australian non-bank lender run by former National Australia Bank staff.
Investec is understood to have fielded offers from international banks, credit funds and special situation funds.
The sale follows a recent decision by the London and Johannesburg-listed Investec to exit Australia and focus on core markets after operating here for 23 years.
The transition is expected to happen over the next 12 to 18 months.
Investec offloaded its professional finance business to Bank of Queensland in 2014.
Working on the divestment is the Australian corporate advisory division, which was previously attached to the bank and has now been subject to a management buyout.
After announcing a retreat from the local market last year, Investec plans to run down its Australian loan books.
Initially, special situation funds came forward with offers of about 90c in the dollar for the book. But the bank is now understood to be working on a sale after fielding offers from prospective buyers prepared to pay at least book value.
When British bank Lloyds left the Australian market after the GFC, it offloaded a $1.6bn loan portfolio in 2011 for about 35c in the dollar and a $2bn portfolio the following year.
The portfolio included some bad loans on distressed property developments, written before the GFC by its subsidiary Bank of Scotland International.
Buyers of the assets included Canadian private equity firm Brookfield and US banks Goldman Sachs and Morgan Stanley.
As with Investec, the sale was part of a retreat from the Australian market, focusing on its core business of corporate lending to major property groups and asset finance.
At that time, companies were carrying too much debt, but they’re better capitalised in the current downturn.
Investec is among a number of banks to expand into Australia before later opting to withdraw.
British bank Barclays wound down its Australian operations but recently returned by way of a small investment in Barrenjoey Capital Partners.
Malaysian lender CIMB shut its Australian operations five years ago, while Deutsche Bank also shut down its global equities sales and trading business.
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