The European Commission on Friday reached an agreement with Commerzbank that allows the lender to integrate a small core of its property-financing unit Eurohypo and wind down the non-central activities instead of having to sell the whole unit.

The move ends the uncertainty about the future of the unit that hampered new business and deterred clients, but leaves Commerzbank with the obligation to wind down 80% of the unit's balance-sheet volume of €166bn. The name Eurohypo will cease to exist.