TWO BOARD members of the Dublin-based public sector lender Depfa Bank, part of troubled German lender Hypo Real Estate, resigned following the German bank's €35 billion bailout by the German state and private banks.

Bo Heide-Ottosen and Paul Leatherdale resigned from Depfa with immediate effect as the Irish-based bank's parent, Hypo, Germany's second-largest commercial property lender, received the multi-billion euro loan guarantee to protect itself from collapse.

Hypo said it sought the emergency credit line after Depfa, which depends on the now closed money markets for its funding, ran into short-term funding problems.

Mr Heide-Ottosen, who is listed as a director of Depfa at the Companies Registration Office (CRO) in Dublin, managed long-term funding and treasury at the bank, and public sector and infrastructural finance within the group.

Hypo's chief financial officer Markus Fell is taking over as head of public sector finance.

Mr Leatherdale was chief executive of Depfa Bank for almost a year until the end of August. He was also responsible for public sector and infrastructural finance.

A spokesman for Hypo said Mr Leatherdale, who is listed on CRO records as having an address in Surrey in the UK, was succeeded by Cyril Dunne, who joined the bank in May 2007 as chief operating officer. Mr Dunne previously worked at Bank of Ireland.

Depfa lends to governments for infrastructure projects under public-private partnerships (PPP). The bank has helped finance PPPs in Ireland such as the National Conference Centre. Hypo provides finance to property developers for offices and shopping centres.

Hypo fell 74 per cent in trading in Frankfurt, the biggest drop since its flotation in 2003.