REAL ESTATE - Hypovereinsbank (HVB) has sold a third portfolio of non-performing real estate loans to Goldman Sachs for an undisclosed price.
The portfolio, which the German bank sold by competitive auction, comprises loans in the lowest risk classes. Around 60% of the loans come from HVB’s real estate restructuring (RER) unit, comprising loans to around 1,000 borrowers collateralised equally between commercial and residential property.
HVB spokesman Hartmut Pfeiffer said the portfolio was "a little bit different" to earlier ones sold to Goldman Sachs for a combined total of €4bn, and that these differences were reflected in the new deal’s price.
The sale puts HVB on target for reducing its RER portfolios to €5bn by the end of the year. "We’re doing what all banks are doing – trying to reduce risk," said Pfeiffer. "Our target is to get it out of the bank totally."
The RER portfolio had a volume of €15.4bn at the beginning of 2005, but previous sales reduced it to €11.7bn by year-end.
However, Pfeiffer said the bank had no firm plans for further reductions in 2007. "We’re working on it but not too quickly," he said.