German crisis bank HRE cuts losses

16th November 2010, Comments 0 comments

State-owned German mortgage lender Hypo Real Estate, which collapsed in 2008 and became a symbol of financial market crisis, said Tuesday it had reduced its third-quarter losses by more than 40 percent.

The troubled bank reported a pre-tax loss of 408 million euros (555 million dollars) in the three months to September, compared to losses of 709 million in the same period last year.

"The group benefited from a slight recovery on the markets during the third quarter," said chief executive Manuela Better in a statement.

For the first nine months of 2010, HRE posted a loss of 1.13 billion euros, compared to a loss of 1.78 billion up to September 2009.

HRE, which last year narrowly avoided bankruptcy before being nationalised, was the only German bank to fail Europe-wide stress tests in July.

It collapsed in late 2008 amid a global crisis owing to investment mistakes made by its German-Irish subsidiary Depfa.

And while the bank has pulled away from the brink of bankruptcy, it still depends on substantial public guarantees to reassure creditors and obtain financing on favourable terms.

© 2010 AFP

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