German 'bad bank' has no plans to lay off Dublin Depfa staff
Published 24/02/2016 | 02:30
There are no current plans to close Dublin-based Depfa's Irish office or lay off more of its 130-plus staff as the process of winding down the operation accelerates, according to FMS-WM, Germany's 'bad bank'.
As the global financial crisis struck in 2008, Depfa was the catalyst for a €134bn bailout required by its then parent, Hypo Real Estate Holding.
The bailout included €124bn of liquidity guarantees and €10bn in capital provided by the German government to Hypo between 2008 and 2010. A liquidator from Grant Thornton has just been appointed to a unit of the Ireland-based bank - Depfa Public Finance Bank.
But FMS-Wertmanagement spokesman Andreas Henry told the Irish Independent that the winding-down process will still take years.
Hypo Real Estate paid €5.2bn in 2007 to buy Depfa, just before international financial markets began to falter.
Hypo was nationalised by the German government in 2009, and in 2014 FMS-WM bought Depfa for €320m.
A planned sale of Depfa was also scrapped, with the German government saying that it hoped to extract more value from winding down the unit within FMS-WM.
Mr Henry said Depfa has a lot of covered bonds and liabilities that run into the next century, and that plans have to be developed to deal with that.
He added that Depfa has bought back certain preferred securities and is now buying back covered bonds, which he said are steps that "are leading to an accelerated winding down".
FMS-WM launched a tender offer last month for €1bn of outstanding euro-denominated asset covered securities, and a total of 1.06bn (€970m) Swiss franc-denominated securities that were issued by Depfa and Hypo.
Mr Henry said an update on Depfa will be given when FMS-WM publishes accounts in April. Depfa is not allowed to write any new business, and its main purpose now is to manage and run down its public sector finance asset base.
Depfa employs 134 people, most of them in Dublin.