Ger­man bad bank says Depfa sale is an op­tion

The Irish Times - Business - - BUSINESS NEWS - JOE BREN­NAN

The Ger­man state’s bad bank tasked more than three years ago with wind­ing down Dublin-based Depfa Bank has con­firmed that a sale of the for­mer pub­lic-sec­tor lender is be­ing con­sid­ered.

Depfa was bought by Mu­nich-based Hypo Real Es­tate in 2007, a year be­fore the Ir­ish bank ran into fund­ing prob­lems in the wake of the col­lapse of Lehman Brothers.

While Hypo Real Es­tate agreed to sell Depfa un­der a re­struc­tur­ing plan tied to its own bailout dur­ing the fi­nan­cial cri­sis, the Ger­man gov­ern­ment pulled the sale in 2014 and trans­ferred the busi­ness to state-owned bad bank, FMS Wert­man­age­ment (FMS-WM).

FMS-WM said yes­ter­day as it re­ported full-year re­sults that “be­sides pur­su­ing the suc­cess­ful wind-up strat­egy, sell­ing the Depfa Group or parts of it is also a pos­si­ble op­tion”.

The Ir­ish Times re­ported last Oc­to­ber FMS-WM was weigh­ing a sec­ond at­tempt to sell Depfa. How­ever, it is likely FMS-WM would seek to take out the bank’s ex­cess cap­i­tal be­fore go­ing about a dis­posal.

Fig­ures in Depfa’s an­nual re­port sug­gest the bank was sit­ting on up to €812 mil­lion of ex­cess eq­uity cap­i­tal. Any move to re­move cap­i­tal would need the ap­proval of the Cen­tral Bank. A se­ries of as­set and li­a­bil­ity trans­ac­tions with FMS-WM have helped Depfa to re­duce its to­tal as­sets by 60 per cent since the end of 2014 to €18.6 bil­lion in De­cem­ber.

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