Eurohypo UK’s senior management team flew to Germany on Thursday to negotiate their future following Commerzbank’s shock decision to shut down all new real-estate lending.
UK boss Max Sinclair and managing director of origination, Mike Acratopulo, were among the team which travelled to the German bank’s Frankfurt headquarters for a day-long detailed briefing on the proposed winding-down of the business.
Key to negotiations for the London team will be learning what latitude they have to explore options such as a management buy-out or a sale of the business rather than the proposed transfer of the real estate book into a “non core segment” in August.
Senior staff from the 65-strong London office are considering a number of options including a management buy-out – potentially in conjunction with other European teams – or the transfer of staff or a sale to a third party.
An MBO could involve the London team negotiating a management agreement with Commerzbank to continue administering existing loans, while bringing in a backer to provide additional capital for new lending.
Sources said a new entrant or institution looking to establish a lending operation in the UK could be interested in picking up the team or business, but it was unlikely a rival bank would have the capital to do a deal.
Eurohypo, which is traditionally one of the UK market’s most active lenders and was set to return to the market next week after a nine-month freeze on new business, has a €56bn (£44.8bn) UK loan book.
The U-turn by Commerzbank on Tuesday night followed an announcement in March that it was going to resume lending through a slimmed-down real estate and ship finance division, giving the real estate team €5bn a year to lend in Germany, the UK, Poland and France.
