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Billy Ballyckz

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  1. French bank Société Générale is set to pull out of property lending, due to the worsening Eurozone debt crisis.

    The bank is undertaking a review of whether to sell or close its real estate finance unit, with the expectation being that the division will be closed and new lending to the sector stopped.

    It has also put a portfolio of non-performing loans of around €500m up for sale, and has held discussions with private equity firms about the possibility of selling €2-3bn of its overall €4bn performing loan book.

    The departure of SocGen would mark a dramatic turnaround in strategy for the bank. As recently as June the bank hired highly-regarded former Lehman Brothers bankers James Jakeman and Pierpaulo Isaaci to head up a four-strong London property lending team, with a target of lending €500m in its first year – potential liquidity that has now been removed from the already debt-starved UK market.

    The sale of the real estate loan portfolio is being undertaken by global real estate and lodging finance head Jean-Francois Despoux and deputy head of global finance David Coxon. Around 25 private equity firms are understood to have signed non-disclosure agreements regarding the sale, and talks have been held about the possibility of selling a larger portfolio.

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