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Germany puts bank that missed out on Irish guarantee up for sale

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Headquarters: Depfa’s Irish HQ, on Commons Street at the IFSC, Dublin

Headquarters: Depfa’s Irish HQ, on Commons Street at the IFSC, Dublin

Headquarters: Depfa’s Irish HQ, on Commons Street at the IFSC, Dublin

The German government has begun preparations to sell Ireland-headquartered Depfa, which was at one time this country's biggest bank.

A sale would draw a line under what became Germany's biggest bank bailout of the financial crisis.

Depfa, a specialist lender to public sector institutions, was the biggest bank in Ireland in terms of assets before the start of the 2008 financial crisis.

Taxpayers here only escaped having to guarantee its losses in the crash because it had been sold to Germany's Hypo Real Estate (HRE) in 2007 for more than €5bn.

When the financial crisis hit, the bank was unable to secure short-term funding, forcing HRE to seek a bailout from German taxpayers that included €124bn of liquidity guarantees and €10bn in capital provided by the German government to Hypo between 2008 and 2010.

HRE was nationalised in 2009. An attempt to sell Depfa for €320m was scrapped in 2014 and the lender was instead transferred to the HRE bad bank FMS Wertmanagement (FMSW).

Now, FMSW has mandated Barclays to find a buyer for Depfa. FMSW chief financial officer Christoph Mueller said in April that a sale of Depfa could be launched in 2020.

Depfa is expected to attract interest from banks including Germany's Helaba and Austrian infrastructure lender Kommunalkredit, or from private equity firms such as Lone Star.

Additional reporting Reuters

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