London, Sydney: US private equity firm Cerberus has snapped up billions of pounds of loans in Ireland and Britain in a pair of deals, reinforcing its position as one of the biggest buyers of European property assets at knock-down prices.

Royal Bank of Scotland said it sold a package of 5,000 commercial property loans with a face value of £4.8 billion ($7.5 billion) to Cerberus as part of its plan to shrink its Irish business. National Australia Bank earlier said Cerberus had paid £1.2 billion for a portfolio of mostly non-performing commercial property loans in Britain.

New York-based Cerberus has picked up property portfolios across Europe in the last two years from banks which are cutting back. It is betting it can turn a profit by buying assets on the cheap in Ireland, Spain, Italy, Britain, France and elsewhere.

RBS, which is 80 per cent owned by the UK government and is scaling back its overseas operations, said it would receive up to £1.1 billion in cash from the sale of the Irish loans. RBS has lost billion of pounds in Ireland after the country’s property crash, but in October decided to keep the business. The loans it has sold are from its “bad bank” of assets it wants to sell or run down.

RBS Chief Executive Ross McEwan last week said he did not expect to get back the £15 billion in capital RBS had sunk into Ulster Bank since the financial crash, but he told The Irish Times the business could deliver 10-12 per cent return on equity in the next four to five years.

RBS had previously written down the value of the loans bought by Cerberus and said they had a carrying value of about £1 billion. The portfolio made a loss of £800 million in 2013, mainly due to provisions for bad loans.

Cerberus’ purchase of UK loans from NAB is part of the Australian bank’s plan to exit its UK operations, where it has made big losses. Cerberus bought a £625 million portfolio of UK loans from NAB in July. It has also bought three portfolios of loans from Lloyds at steep discounts, including a 1 billion euro book of commercial real estate loans, mainly in the Nordic region, Germany and France.