Van Lanschot has signed an agreement with an affiliate of Cerberus Capital Management LP on the sale of part of its portfolio of nonperforming commercial real estate loans. At a face value of over € 400 million, this transaction will accelerate the runoff of the non-core corporate loan portfolio that started in 2013.
Karl Guha, Chairman of Van Lanschot’s Executive Board: “This is a next step in the implementation of our wealth management strategy, which focuses on activities contributing to the preservation and the creation of wealth for our private and institutional clients. Structured as a competitive bidding process, the transaction allows us to benefit from market opportunities in this segment, and we are pleased to have found an experienced and reliable party to manage the portfolio professionally.”
In 2013, Van Lanschot announced its intention to halve the risk weighted assets of its corporate loan portfolio over a four-year period. The sale significantly reduces the risk profile of the corporate banking loan book and will have a positive impact on loan loss provisions going forward. As a result of this transaction, the impaired ratio of the overall loan book of Van Lanschot (5.8% at YE 2014) reduces by more than 2.5 percentage points on a pro forma basis. The transaction is expected to result in a one-off charge of approximately €23 million (before tax) in the second half of 2015 and will have a marginally positive impact on Van Lanschot’s core capital position.
Following the transaction, Van Lanschot will continue to run down the remaining portfolio (with an outstanding principal of €3.1 billion as per 31 December 2014) managed by its Corporate Bank.
The transaction is expected to be completed in the third quarter of 2015.
Press release - Van Lanschot to sell portfolio of CRE loans to Cerberus Capital Management (pdf)