June 4 (Reuters) - State-backed Lloyds Banking Group Plc said it would sell a book of UK commercial real estateloans to U.S. hedge fund Cerberus for 352 million pounds($589.72 million), a 34 percent discount to their gross value.
The move makes Lloyds the latest European lender to offloadnon-core loans onto a private equity firm.
Lloyds said the loans had a gross value of 536 millionpounds and were being sold to Promontoria Holding 109 B.V., anaffiliate of Cerberus Global Investors.
The portfolio generated a 17 million pound loss last year,Lloyds said.
Europe's banks have been selling loans to shrink balancesheets that were bloated during the run up to the financialcrisis. Many have restructured and separated businesses andloans they no longer want.
The Lloyds deal is part of an ongoing reduction of thebank's balance sheet since its taxpayer rescue during thefinancial crisis. It is not expected to have a material impacton the group.
In November, Lloyds sold a 1 billion euro ($1.36 billion)portfolio of commercial real estate loans to Cerberus at a 21percent discount to their nominal value.
Germany's Commerzbank and Italy's UniCredit also offloaded loans this year in a bid to clean upbalance sheets and free up capital ahead of European bankinghealth checks. ($1 = 0.5969 British pounds)($1 = 0.7341 euros) (Reporting by Richa Naidu in Bangalore; editing by Andrew Hay)