Troubled German bank HRE says it has repaid some state aid
FRANKFURT (AFP) – The troubled German bank Hypo Real Estate said Monday it had paid back a small part of the aid it had received from the government and other German financial institutions.
HRE, which is now completely state-owned, reimbursed seven billion euros (10 billion dollars) of an initial rescue package worth 50 billion euros provided in 2008 by a consortium that included the federal government, the central bank and private institutions, a statement said.
The total amount of guarantees still at HRE’s disposition fell to 95 billion euros from 102 billion, the bank said.
The “cost to HRE of the cash availability has declined,” noted the German financial market stabilisation fund SoFFin, the body with which the guarantees were negotiated.
HRE is obliged to pay a tax on the liquidities even if it does not use the cash, SoFFin explained.
The bank collapsed just over a year ago amid the global financial crisis owing to mistakes made by its German-Irish subsidiary Depfa.
German authorities nationalised the bank to avoid a failure they felt could threaten the banking system as a whole.
On Monday, the European Commission gave its provisional authorisation for 18 billion euros in new public guarantees for HRE pending a final restructuring plan for the bank.
European Union authorities have insisted that banks that have received public aid sharply reduce their operations.
source: yahoonews
