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