German lender Hypo Real Estate may need to tap the government for even more capital than previously expected, according to reports in various media.
German lender Hypo Real Estate may need to tap the government for even more capital than previously expected, according to reports in various media.
The bank's capital needs had been put at between EUR 6-10 bn, but Germany's Welt am Sonntag reported on Sunday that the group's chairman Michael Endres said he would not be surprised if an injection of EUR 10 bn may still not be enough. Endres said in an interview that the bank 'clearly has a solvency problem,' due to its problematic loan portfolio, the newspaper reported.
Hypo Real Estate has already received over EUR 100 bn of government aid in the form of guarantees and credit. Its problems stem in part from the group's Irish Depfa public-finance unit, which was unable to raise short-term funding last year.
In June shareholders approved a plan for the government to take overall control of the bank in exchange for a EUR 2.96 bn capital injection.
The terms of the deal lifted the stake held by Germany's bank-rescue fund Soffin to 90% from 47% and the government now intends to squeeze out the remaining shareholders through a forced acquisition of their shares.
