When Unicredito took over HVB Group AG last year, analysts were concerned by HVB's large real estate exposure, though this concern has faded somewhat.

Unicredito said in a presentation to analysts that existing portfolio is successively being replaced by profitable and marketable new business. The activity is being re-positioned as 'a real estate financing boutique' with a smaller scale but a highly sophisticated service, it said. The report said that by 2008, the German portfolio is seen falling to 11 billion euro, from 19.8 billion at the end of 2005.

By 2008, German revenues are seen falling about 5% from 2005's 249 million euros, operating costs by 12% from 101 mullion, and loan loss provisions by 13% from 226 million.

By M. Sese
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