Commerzbank AG (CRZBY)

[Enterprising Investor]

Commerzbank Sells UK Commercial Real Estate Loans (7/15/13)

By Nicky Redl
Germany's Commerzbank AG (CBK.XE) said on Monday it has sold U.K. commercial real estate loans worth around 5 billion euros ($6.5 billion) to a consortium made up of U.S. Wells Fargo and Lone Star Funds.

The sale will significantly improve the bank's risk profile and reduces its volume of non-performing real estate loans by EUR1.2 billion, said Germany's second-biggest lender.

The sale will reduce its risk-weighted assets by EUR1.5 billion but it will also create charges of EUR179 million in 2013, of which around EUR134 million will be booked in the second quarter.

The sale won't have a notable impact on the Core Tier 1 ratio of Commerzbank.

Commerzbank now expects the exposure at default, including non-performing loans, to be significantly less than EUR90 billion at the end of 2016, it added.

The sale involves the entire commercial real estate financing activities of Hypothekenbank Frankfurt in the U.K.

Write to Nicky Redl at [e-mail]

http://online.wsj.com/article/BT-CO-20130715-702107.html?mod=WSJ_qtoverview_wsjlatest