Germany’s sale of Depfa Bank advances as S&P questions strategy

Dublin-based Depfa is planning to hand back excess capital to German bad bank FMS-WM

Hypo Real Estate Bank chief executive Georg Funke with Depfa chief Gerhard Bruckermann in 2007 when Depfa was bought by the commercial property bank. Photograph: Thorsten Jochim/Getty Images

Hypo Real Estate Bank chief executive Georg Funke with Depfa chief Gerhard Bruckermann in 2007 when Depfa was bought by the commercial property bank. Photograph: Thorsten Jochim/Getty Images

The German state bad bank that took over Depfa Bank five years ago is pressing ahead with preparations to sell the Dublin-based public sector lender next year, even as a leading ratings agency has questioned the strategy, according to industry sources.

Depfa Bank, which nearly collapsed this month 11 years ago as it struggled to finance itself in the wake of Lehman Brothers’ implosion, is planning to hand back hundreds of millions of euro of excess capital to FMS Wertmanagement (FMS-WM), the German bad bank, by the end of December.

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