Monday 14 October 2019

German government to sell Ireland headquartered Depfa bank

DEPFA bank
DEPFA bank

Donal O’Donovan

The Germany government has begun preparations to sell Ireland headquartered Depfa, 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 before the financial crisis in terms of assets in 2008 at the start of the financial crisis.

Taxpayers here escaped guaranteeing its losses after the crash because it had been sold to Germany’s Hypo Real Estate in 2007 for over €5bn.

When the financial crisis hit, the bank was unable to secure short-term funding, forcing Hypo Real Estate 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.

Hypo Real Estate 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 had said in April that a sale of Depfa could be launched in 2020.

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