Commerzbank has gone back on a decision to launch a new real estate and ship finance core bank segment and will instead wind up the business areas, it said on Tuesday, also announcing that Eurohypo will be renamed Hypothekenbank Frankfurt AG.

Commerzbank communicated the news as part of an announcement on an acceleration of its EC-enforced restructuring, with the bank deciding to wind up rather than continue its commercial real estate and ship finance businesses, as it had been planning to do on a reduced scale.

“The new Core Bank segment Real Estate and Ship Finance will not be launched as had originally been planned,” it said.

Commercial real estate and ship finance will instead be transferred in full to an internal wind-down entity, the non-core assets (NCA) segment.

In line with plans announced at the end of March, the public finance business of Eurohypo is also being transferred to the NCA segment for winding down, with the commercial real estate and public finance portfolios remaining in the Eurohypo legal entity, said Commerzbank.

Eurohypo will be renamed Hypothekenbank Frankfurt, probably as of 31 August, according to its parent.

“Thus, Commerzbank is meeting a requirement of the European Commission in relation to the winding-up conditions for Eurohypo,” it said. “The new name, which will also apply to subsidiaries of Eurohypo, refers to a predecessor institute of Eurohypo.”

One of several entities that have over the years been combined into Eurohypo was Frankfurter Hypothekenbank, which in May 1995 was the issuer of the first ever jumbo Pfandbrief.

Johannes Rudolph, head of covered bond research at HSBC Trinkaus, noted that Eurohypo’s business will, as in the past few years, decline considerably and that its cover pools will shrink to around one-third in the next five years. He said that he would therefore have understood if Eurohypo had been renamed Bornheimer Hypothekenbank, after a part of Frankfurt, rather than bear the name of the whole city.