Germany's nationalized Hypo Real Estate gets another euro3 billion in capital from government
Associated Press
11/04/09 4:35 PM EST
BERLIN — Nationalized German lender Hypo Real Estate Holding AG said the government's financial-sector rescue fund on Wednesday granted it another euro3 billion ($4.4 billion) in fresh capital.
The Munich-based bank is the most prominent German victim of the financial crisis. It ran into trouble in September 2008 after its Ireland-based unit Depfa Bank PLC failed to find short-term funding amid the widening credit crunch.
The German government, which argued that it needed to take direct control after intervening repeatedly to shore up the company with loan guarantees, completed its nationalization of Hypo Real Estate last month.
By then, the government already had injected some euro3 billion in capital. Chief executive Axel Wieandt said in early October that the bank would need at least another euro6 billion to euro7 billion in fresh capital by 2011.
Hypo Real Estate said European Commission approval for the latest capital injection is expected "within the next few days."
The company's earnings are still weighed down by hefty loan loss provisions, and it has said it does not expect to return to profitability before 2012.
