Commerzbank offloads risky Spanish loans
Commerzbank, Germany's second-biggest lender, is to offload a bundle of dud property loans in Spain, it said on Thursday.
The bank said it had reached agreement to sell 710 million euros' ($960 million) worth of non-performing Spanish real-estate loans.
Commerzbank said in a statement that it had profited from the favourable market conditions and "reduced its commercial real estate portfolio through the sale of non-performing loans in Spain."
The loans were sold to "international investors" for an undisclosed sum, the statement said.
The sale will clean out 600 million euros' worth of risk-weighted assets from Commerzbank's balance sheet and result in a "minor burden on earnings which will already be included" in Commerzbank's accounts for the fourth quarter of 2013, it explained.
It will mean that Commerzbank has halved the volume of non-performing loans in Spanish commercial real estate to around 1.0 billion euros since the beginning of 2013, the statement said.
"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."
The bank would pursue its asset-reduction programme "and focus on transactions that meet our stringent requirements" said board member Sascha Klaus.
© 2014 AFP