Commerzbank has disposed of more than €5bn in property loans in Portugal, Spain, and Japan, as the global banking and financial services company continues to run down the assets in its “bad bank.”
The Frankfurt-based lender has announced that it sold €4.4bn in loans from its Spanish book, as well as a smaller group of non-performing loans in Portugal to Lone Star, a private equity group, and JPMorgan for an undisclosed amount.
Another €700m from its Japanese book was sold to PAG, the Asian alternative investment manager. The bank stated that the deals would reduce total non-performing loans by one-third.
Commerzbank has been making progress quickly, and had cut its non-core unit portfolio by 29 per cent at the end of the first quarter from the same time last year. It plans to cut its non-core assets to €75bn by 2016, down from its previous goal of €90bn.
Commerzbank said that the Portuguese, Spanish, and Japanese transactions would lessen its risk-weighted assets by €3.2bn.
Its core capital is expected to improve, and an update is expected when the bank announces its second-quarter results.
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