March 11 Commerzbank AG, Germany's second-biggest lender, is exploring a sale of the UK property business of its mortgage unit Hypothekenbank Frankfurt International, a person familiar with the matter said on Monday.
The Financial Times, citing people familiar with the matter, reported earlier on Monday that Barclays was managing the sale and that U.S. investment firms such as Blackstone Group LP , Lone Star Funds and Starwood Capital have expressed interest in buying all or parts of the business.
Commerzbank, Blackstone and Lone Star Funds declined to comment while spokespeople for Starwood Capital and Barclays could not immediately be reached for comment.
Cash-strapped European banks, including bailed-out Commerzbank, have so far been reluctant to shed assets to rebuild their weakened balance sheets as sales could force them to recognise losses in their portfolios.
The Financial Times reported that the UK property loans for sale had a nominal value of 5 billion pounds ($7.45 billion) and that most of the loans were performing well. A sale is not the only option being considered, with Commerzbank preferring to hold the loans until maturity rather than sell at a steep discount, the newspaper said.
Commerzbank last year decided to wind down Hypothekenbank Frankfurt International, previously known as Eurohypo, which does not underwrite new business anymore but runs off existing loans.
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