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Deutsche Bank Nears $1B Sale of U.S. CRE Loans
Deutsche Bank is in talks to sell nearly $1 billion of U.S. commercial real estate debt, Bloomberg News reported Wednesday. James von Moltke, the bank’s CFO, said on a third-quarter earnings call Wednesday the company was “encouraged” by indicative pricing on the loans and has made a provision of €23 million (approximately US$24.8 million) in anticipation of the sale, which hasn’t closed yet.
“Our full-year CRE provision run rate has been at a cyclically higher level, but has now substantially declined quarter on quarter, as envisaged,” Moltke said in prepared remarks. “We continue to see more signs of stabilization, which supports our confidence in a gradual reduction in future provisions.”
The bank is promoting the loan portfolio to secure capital relief, Bloomberg reported in August. Seeking Alpha said in August that with $16 billion in loan exposure to U.S. CRE at the end of Q2, of which $7 billion is tied to offices, Deutsche is a sizable lender to CRE developers.
