Three bidders vie to take on German lender WestImmo

Aareal, Pimco and ING tipped to be in running to acquire €15.2bn book

A sale is under way to find a new owner for German real estate bank WestImmo, which has been prevented from taking on new business since 1 July 2012.

Three potential buyers – two are understood to be Aareal Bank and Pimco, while ING has been tipped as the third – are said to be in due diligence to buy the bank, which this June had a €15.2bn loan book.

WestImmo (Westdeutsche ImmobilienBank) is now owned by Erste Abwicklungsanstalt, the German government agency set up to wind up the problem assets of WestImmo’s parent, Westdeutsche Landesbank.

The EAA declined to comment on any sale, but has said that it plans to find a ‘strategic’ buyer for WestImmo, allowing its lending to resume, rather than selling the loans.

Presenting WestImmo’s half- year results early last month, CEO Claus-Jurgen Cohausz said: “We welcome EAA’s efforts to sell WestImmo as an entity to enable the business to continue.”

The loanbook has shrunk since a previous attempt to sell the bank in 2010, when private equity buyers, including Apollo and Blackstone, struggled to bid for a lender, rather than a loanbook, without receiving “significant guarantees” from WestLB.

There have been several recent examples of bank teams and clients transferring to other lenders, albeit ones with much smaller books.

Commerzbank sold the former Eurohypo UK business to Wells Fargo and Deutsche Bank is to sell Postbank’s UK business to GE Capital Real Estate.

Aareal is a real estate bank that came through the financial crisis successfully and which some suggest needs to grow.

ING has established commercial property lending in the markets where it has a strong funding base from deposits, including Germany, as well as the Netherlands and Poland.

Although WestImmo is not taking on any new business it continues to offer renewals to its customers as part of its active cover pool management for its pfandbrief covered bond issuance.