The new bank will be called Eurohypo, and will have a total loan book of €138.3 billion ($125 billion). Last year alone the three merged banks agreed €18.4 billion ($16.5 billion) in commercial property loans.
The deal is very much a merger of equals, as Deutsche Hyp accounts for 30% of the existing loan books and Eurohypo and Rheinhyp account for 35% each. As well as achieving significant costs savings, estimated at €120 million ($108 million) per annum from 2004, the new bank will aim to extend its activities into new markets, including North America.
At the same time it will look to extend its range of services from simple mortgage lending into more profitable areas such as corporate finance and securitisations, traditionally the preserve of the investment banks.
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