French bank Société Générale has suspended new UK and European property lending as eurojitters force it to cut its real estate exposure.
The bank is to review whether to sell or close its real estate finance unit and has plans to deleverage its balance sheet through loan sales.
The move, which will not affect deals which have already been granted credit approval, comes just five months after the firm brought in former Lehman Brothers bankers James Jakeman and Pierpaulo Isaaci.
They were recruited to head a four-strong London property lending team with a target of lending €500m in its first year.
SocGen has also put a portfolio of non-performing loans of around €500m up for sale, and has held discussions with private equity firms about the possibility of selling €2bn-€3bn of its overall €4bn performing loan book.
The sale of the real estate loan portfolio is being undertaken by global real estate and lodging finance head Jean-Francois Despoux and deputy head of global finance David Coxon.
Around 25 private equity firms are thought to have signed non-disclosure agreements regarding the sale, and talks have been held concerning the sale of a larger portfolio.
No decision has been taken as to whether SocGen will resume new lending to UK and continental European real estate after its deleveraging programme is complete.
SocGen refused to comment.
bridget6.o’connell@estatesgazette.com
