Aareal Bank to sell billion-euro loan portfolio

FRANKFURT, April 5 (Reuters) - German property lender Aareal Bank (ARLG.DE: Quote, Profile, Research) wants to sell a portfolio of private home financing loans worth more than a billion euros ($1.6 billion) to release capital for investment in new businesses.

Aareal said in its invitation to its annual shareholders' meeting published on Saturday the loans in question were no longer in line with its strategy, and said likely buyers were German and European banks.

A company spokesman said the portfolio was worth over a billion euros.

Aareal has said it has no exposure to the risky U.S. subprime market that sparked a global credit crunch, but last week delayed its after-tax return-on-equity target by a year to 2010 because of turbulent financial markets.

As a first step to disposing of the home loans, Aareal wants to hive them off into its subsidiary, Ariadne Portfolio, it said in the invitation to shareholders. (Reporting by Patricia Nann; editing by James Jukwey)