Commerzbank offloads €5bn property book

City A.M. Reporter
SHARES in Commerzbank rose yesterday after Germany’s second-biggest lender said it had sold British property loans worth €5bn (£4.3bn) to US rival Wells Fargo and private equity firm Lone Star Funds to shrink its loan book and reduce risk.

Commerzbank said that it agreed to a 3.5 per cent discount on the loan portfolio’s book value.

Wells Fargo is acquiring the performing loans, while Lone Star is scooping up the €1.2bn in non-performing assets, Sascha Klaus, board member of Commerzbank’s mortgage unit Hypothekenbank Frankfurt – formerly known as Eurohypo – said in an interview published on Commerzbank’s intranet.

The bank’s lending deals included the Westfield Stratford City shopping centre next to the Olympic stadium in London and Europe’s most expensive block of flats, One Hyde Park.

Commerzbank shares extended gains after the announcement. They closed up 4.3 per cent, having risen by three per cent in early trading after a magazine report that Germany has spoken to the chairman of UBS about the possibility of the Swiss bank buying the government’s remaining Commerzbank stake.