European banks shrink property portfolios

Impeding regulatory changes are forcing European Banks to drastically reduce their exposure to real estate loans. Read: Fitch downgrades 18 banks New rules, which will increase the amount of capital banks are required to hold against commercial property loans, triggered a deleveraging process that could lead to lenders shedding €20 billion ($25.5 billion) worth of […]

By Staff | September 24, 2012 | Last updated on September 24, 2012

1 min read

Impeding regulatory changes are forcing European Banks to drastically reduce their exposure to real estate loans.

Read: Fitch downgrades 18 banks

New rules, which will increase the amount of capital banks are required to hold against commercial property loans, triggered a deleveraging process that could lead to lenders shedding €20 billion ($25.5 billion) worth of loans, according to a report on FT.Com.

Read: Global property markets strained: report

Some of Europe’s leading banks have been aggressively selling their real estate portfolios while the pressure is mounting on others to offload “the multibillion-euro debt pile amassed during the continent’s decade-long property boom.”