German banks Commerzbank, Deutsche Bank and Dresdner Bank confirmed today that they are to merge their property lending arms.
The three mortgage banking subsidiaries – Deutsche Hyp, Eurohypo and Rheinhyp – will be combined into Eurohypo AG. The three subsidiaries had combined sales of ¬18.4bn last year. All three banks lend on commercial property in the UK and both Eurohypo and Rheinhyp are among the top 15 lenders to UK commercial property.
The merger is expected to bring ¬120m of cost savings each year from 2004, by which time Eurohypo AG is also expected to generate more earnings than the separate arms. Where the parent banks have separate commercial property lending operations, these will be incorporated into Eurohpyo AG.
Dr Karsten von Koller, chairman-designate of the new bank, said it aimed to be a market leader in real estate finance. As well as providing senior and syndicated debt, it will be offering real estate investment banking services.
EGi News 06/11/01
