Home News UPDATE: Despite billions of aid HRE writes further loss

UPDATE: Despite billions of aid HRE writes further loss


By Madeleine Nissen and Rüdiger lap

FRANKFURT (Dow Jones) – now nationalized Real estate financier Hypo Real Estate (HRE) has in the first quarter, despite the Billion in loans from the state further losses written. Fees charged by was for the billions of aid and loans and provisions of the Loss before income taxes 324 (previous year: EUR 406) million EUR, shared the HRE on Friday with. The credit risk provisions struck with EUR 260 million negative impact, the Fees charged by 119 million EUR.

A discharge were against the lower cost. In trade could the HRE, which are rescued by the state before the collapse had to reduce their losses. The guarantees of the Special Fund SoFFin currently amount to EUR 93.5 billion, plus a cash infusion comes from the 7.85 billion EUR. Of this the final installment in the volume of 1.85 billion EUR has yet to be approved. Despite this assistance, the Capitalisation of a HRE Tier 1 capital ratio of 7.7% below average continues.

On the cost list of CEO Manuela Better Moreover, additional expenses related to the planned Settlement institution to which the HRE is not strategic or non-performing intends to transfer assets. However, looks at a Better HRE good way, the loss in the current fiscal year to . Reduce With a profit before 2012, it expects the bank, however, continue not.

In the first quarter, net interest income by reducing interest-bearing assets 291 (371) million EUR has fallen. When Trading income fell to a loss of 105 (minus 162) million EUR. The Net commission income was minus EUR 100 million largely unchanged. Here there was no effect of the credit charges from negative.

The high level of risk prevention is difficult, given the length of the Real estate markets and the number of bad loans is necessary. Therefore, the HRE also counts in Future costs resulting from the provision.

Another risk are the troubled EU countries are: The HRE has around 80 billion EUR in the States and the public sector in these countries invested. The lion’s share accounts Italy with EUR 26.8 billion, followed by Greece (EUR 7.8 billion), Spain (2.7) billion EUR, Portugal (EUR 1.6 billion) and Ireland (0.26 billion EUR). In addition, there Loans to municipalities, such as those countries with a volume of 41 Billion EUR. However, the HRE, calculated similarly to other banks well, not at first with charges from the commitment and has therefore taken no precautions.

The volume has little in the past three months changed. If known, HRE among German financial institutions on most active in these countries. But other houses have invested billions. Thus, Commerzbank is in its Public finance business with EUR 26.5 billion committed. Most of this goes to the € Hypo daughter back. Postbank, the German bank at the close 30% stake, has EUR 7.6 billion in the fire.

Greece is on the brink of insolvency and can are effectively in the international capital markets no longer refinance. The national debt currently stands at 115.1% of nominal Gross domestic product. But other countries are currently in a weak Position: Sun, Standard & Poor’s credit rating recently, the graduated from Portugal and Spain. Countries such as Ireland and Italy Although there are better, but here the market has a concern they could in Orbiting around Greece are affected.


Website: www.hyporealestate.de

-From Madeleine's lap and Rüdiger Nissen, Dow Jones
+49 (0) 69-29725 115, madeleine.nissen @ dowjones.com
DJG / maw / rso / brb
Visit our website http://www.dowjones.de 

(END) Dow Jones Newswires

May 07, 2010 05:44 ET (09:44 GMT)

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