By Arno Schuetze and Valentina Za
FRANKFURT (Reuters) – UniCredit (MI:CRDI) is looking to sell its German leasing operations and a local real estate investment unit, two sources familiar with the matter said on Tuesday, marking another move by the Italian bank to shed assets.
UniCredit’s German leasing business, which provides financing for capital goods such as machinery, has an equity value of around 500 million euros ($587 million), one of sources said.
A representative for UniCredit in Germany declined to comment.
UniCredit has completed a successful restructuring under CEO Jean Pierre Mustier since mid-2016, shedding billions of euros in assets to bolster its financial strength and clean up its balance sheet.
European banks are now bracing for a new surge in unpaid loans once government support measures to help businesses hit by coronavirus lockdown measures and weakening demand are phased out.
UniCredit’s plans come after sources told Reuters last week rival Italian bank Intesa (MI:ISP) had received two non-binding offers for its leasing business, which it is selling together with 1 billion euros in impaired leasing contracts.
Banks that divest leasing operations continue to offer their customers leasing services through a third-party provider.
UniCredit recently struck a partnership with Deutsche Leasing and Deutsche Anlagen Leasing to offer leasing services in Germany.
UniCredit is also set to kick off early next month the sale of WealthCap, a business which offers customers investment opportunities in real estate, the two sources said.
WealthCap is estimated to have an enterprise value of 150-200 million euros, one source said.
Mustier, who has cut UniCredit’s problem loan ratio below the industry average to 4.8% of total lending, earlier this year ruled out any further large asset sales saying the group’s perimeter would now remain broadly stable.
($1 = 0.8514 euros)