HypoVereinsbank has sold some of its non-performing real estate loans to Goldman Sachs for €2.17bn. But the German bank claims it’s in no hurry to hive off the remaining 50% of a portfolio that no longer fits its strategy.
“We’d like to get rid of it as soon as possible but we’re not under any time pressure,” said HypoVereinsbank spokesman Knut Hansen.
In a press statement the bank announced moves to reduce the portfolio further in the first half of 2006, although Hansen would not disclose specific short-term plans for further divestments.
“The market for non-performing loans is still looking good. We might sell single assets, but it depends on what’s happening in the market, and the market can change very quickly,” he said.
This is not the first time Goldman Sachs has helped the bank offload its unwanted real estate assets. Late last year the US bank acquired €1.8bn of non-performing loans – a purchase that helped HypoVereinsbank reduce the portfolio from €15.4bn at the beginning of 2005 to €11.7bn by the end of it.
The real estate restructuring unit (RER) that drove the deal emerged at the start of 2005 as part of the realignment of HypoVereinsbank’s German business. The realignment reflected a strategic shift away from the bank’s suffering mortgage business towards more profitable retail and corporate banking.
“In the past our policy was to work out all non-performing loans ourselves,” said Hansen. “That meant keeping and developing the portfolio, which took up a lot of time. Now we want to get rid of it – but for the best price we can get.”
The Goldman Sachs deal is subject to shareholder approval at HypoVereinsbank’s annual general meeting in May. Given a majority holding of more than 90%, a shareholder revolt is unlikely.
