Commerzbank has profited from the favorable market conditions and reduced its commercial real estate portfolio through the sale of non-performing loans in Spain. The Bank has sold large-volume commercial real estate financing commitments and corporate loans of Hypothekenbank Frankfurt in Spain with a volume of €710 million to international investors. It was agreed that confidentiality be maintained on further details of these transactions.
As a consequence of the reduction of €600 million in risk-weighted assets resulting from the transactions in the first quarter of 2014, there is a positive net capital relief effect of approximately €20 million. The minor burden on earnings resulting from the sale will already be included in the result of Commerzbank in the fourth quarter of 2013.
“We are pleased that through these transactions it has been possible to reduce non-performing commercial real estate commitments in a difficult market in a value preserving way. We will consistently continue to fulfil our asset reduction assignment and focus on transactions that meet our stringent requirements, arising from present market opportunities,” said Sascha Klaus, divisional board member Non-Core Assets Commercial Real Estate.
With these transactions Commerzbank has halved the volume of non-performing loans in the Spanish commercial real estate portfolio from approximately €2 billion to approximately €1 billion since the beginning of 2013.