Bloomberg News

EU Commissioner Almunia Is Close to Changing Bailout Terms for Commerzbank

March 12, 2012

Commerzbank AG (CBK), a German lender rescued by taxpayers following the 2008 financial crisis, is “close” to a deal with European Union regulators to change the terms of the bailout that required it to sell its Eurohypo unit.

EU Competition Commissioner Joaquin Almunia said European Commission officials and Commerzbank were discussing “what other conditions can compensate” for the bank’s request to change the EU’s order for it to sell Eurohypo by the end of 2014. Regulators “are very, very close to having an agreement to have a change of conditions for Commerzbank,” he told reporters today.

Commerzbank agreed to sell the public-finance and commercial-property lender as a condition for EU approval of its rescue by the German state following the collapse of Lehman Brothers Holdings Inc. Germany’s second-biggest lender has said a sale of Eurohypo would be difficult because of concerns over the division’s ability to fund itself.

Commerzbank spokesman Maximilian Bicker declined to comment when reached by telephone today. Chief Executive Officer Martin Blessing told reporters at a press conference at the bank’s headquarters in Frankfurt last month that Commerzbank won’t provide updates on talks with the commission.

Eurohypo tapped the European Central Bank’s three-year loans in December to reduce the unit’s funding dependence on Commerzbank, Chief Financial Officer Eric Strutz told analysts on a Feb. 23 conference call.

To contact the reporter on this story: Aoife White in Brussels at awhite62@bloomberg.net;

To contact the reporter responsible for this story: Nicholas Comfort in Frankfurt at ncomfort1@bloomberg.net


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