FRANKFURT: Commerzbank is weighing transferring its loss-making real estate finance unit Eurohypo to the German state, the Financial Times Deutschland reported, citing a source familiar with the thinking.
The move would allow Commerzbank to avoid a fresh state-aid inquiry by the European Commission, which would probably be accompanied by tough fresh conditions, the paper wrote in its Tuesday edition.
Commerzbank is seeking a "free market solution," the paper quoted the source as saying. If the loss for Commerzbank in the case of a sale to the government is big enough, the European Commission could approve the divestment, the source said.
Commerzbank, which has been ordered by the Commission to sell Eurohypo by the end of 2014 as a condition for approving state aid to the lender in the financial crisis, was not immediately available for comment.
Commerzbank Chief Executive Martin Blessing has ruled out returning to the state for support, as Germany's second-biggest lender works to restore its financial strength and boost its regulatory capital after the crisis.
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