Germany's troubled HRE bank seeks fresh bailout: report

10th September 2010, Comments 0 comments

Germany's troubled Hypo Real Estate bank, which last year narrowly avoided bankruptcy before being nationalised, wants another 40 billion euros in state aid, the Stern's website reported Friday.

Germany's banking sector stabilisation fund SoFFin would make a decision on the issue Friday evening, the Germany weekly reported.

SoFFin declined to comment on the report when approached by AFP.

So far, HRE has received 7.85 billion euros in cash from the German financial market stabilisation fund SoFFin along with 103.5 billion euros in loan guarantees.

Declining interest rates, the strengthening of the dollar and the bank's exposure to loans in euro zone countries hit by the economic crisis have further exposed the bank, Stern reported.

HRE was the only German bank to fail Europe-wide stress tests in July.

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

It was nationalised last year following a long flirt with bankruptcy.

© 2010 AFP

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