Depfa has pre-tax income of €124m as it winds down operations

DEPFA, THE Irish unit of troubled German bank Hypo Real Estate (HRE), recorded a pre-tax income of €124 million in 2011 as it began to wind down its operations.

Accounts filed for 2011 show that the bank’s net interest income fell by 7 per cent to €196 million as it transferred some of its assets to Germany’s bad bank, FMS Wertmanagement.

Germany has poured billions into embattled property lender Hypo Real Estate, nationalising the bank in 2009. IFSC-based Depfa was bought by HRE in 2007. In June last year it was ordered to cease writing new business.

While the bank posted a pre-tax income of €124 million, compared to a loss of €680 million the previous year, the bank stressed this was mainly due to one-off effects.

Depfa was a major lender to the public sector in the form of bond and loan financing. Net interest income on Depfa’s value management division for Europe and the rest of the world increased from €21 million to €126 million as the bank benefited from the positive effect of the buyback of DepfaAcs Bank asset-covered securities that were redeemed before maturity.

Net income from its value management America division fell from €102 million to €57 million.