Saturday 23 September 2017

Germany won't sell Depfa Bank

DEPFA bank
DEPFA bank

Joe Brennan and Rainer Buergin

Germany's government has abandoned plans to sell the Dublin-based Depfa Bank unit, choosing instead to wind it down.

Depfa is a unit of bailed-out lender Hypo Real Estate Holding.

Depfa's assets, which stood at €49bn at the end of December, will now be moved to Germany's state-owned bad bank FMS Wertmanagement AoeR, or FMS-WM, the German finance ministry said last night. German taxpayers, who own Hypo Real Estate, would achieve "a higher value" by running down the unit than by selling it, the German government said.

The collapse of IFSC-based Depfa was the biggest in Irish history. The bill was picked up by the German taxpayer because the company was effectively German and a collapse would have hit the German financial sector hard.

"We have created very good options by preparing the sale of Depfa ready for signing," said Manuela Better, chief executive officer of Hypo Real Estate. "It goes without saying that the decision not to sell, but to wind down under FMS-WM, is that of the owner."

Leucadia National and Massachusetts Mutual Life were reportedly picked last month as preferred bidders, after offering €350bn for Depfa.

The German finance ministry said it would only be sold if a deal offered an "economically viable alternative" to winding it down. (Bloomberg)

Irish Independent

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