Hypo Real Estate
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| Type | Public (FWB: HRX) |
|---|---|
| Founded | 2003 |
| Headquarters | Munich, Germany |
| Key people | Axel Wieandt (CEO and Chairman of the executive board), Michael Endres (Chairman of the supervisory board) |
| Industry | Financial services |
| Products | Commercial property financing, infrastructure and public finance, capital markets and asset management |
| Revenue | €906 million (2007)[1] |
| Profit | ▲ €504 million (2007)[1] |
| Total assets | €400.2 billion (2007)[1] |
| Employees | 2,000 (2007)[1] |
| Website | www.hyporealestate.com |
The Hypo Real Estate Holding AG (FWB: HRX) is a holding company based in Munich, Germany which comprises a number of real estate financing banks. The company's activities span three sectors of the real estate market: commercial property, infrastructure and public finance, and capital markets and asset management. Hypo Real Estate is the second largest commercial property lender in Germany.[2]
The bank originated in 2003 from the real estate financing business of HypoVereinsbank. It employs about 2,000 people and was one of the 30 members of the DAX stock index of the largest German companies between December 2005 and December 2008, before the shares were demoted to the MDAX. In 2007 it acquired public finance company Depfa Bank.[3] The company remains a legal entity as a wholly-owned subsidiary of the Hypo Real Estate Group.
The firm was bailed out by the Bundesbank and other German banks in October 2008 in the midst of the global financial crisis.
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[edit] Bailout
[edit] September 2008: First crisis summit
Hypo Real Estate encountered financial difficulties during the liquidity crisis of September 2008, principally due to the heavy debt burden of its Depfa subsidiary.[4] On 29 September 2008 Finance Minister of Germany Peer Steinbruck announced that a €35 billion credit line would be extended to Hypo Real Estate from the government and a consortium of German banks.[4]
After the first crisis summit, the supervisory board members independent from and unaffiliated to J.C. Flowers & Co. and Grove International Partners LLP resigned from the office. As successors, Michael Endres (chairman), Bernd Knobloch, Edgar Meister, Sigmar Mosdorf, Hans Jörg Vetter, Bernhard Walter and Manfred Zaß were appointed to the board.[5]
[edit] October 2008: Second crisis summit
The deal fell apart on 4 October 2008 after the banking consortium involved pulled out.[2] A second proposed bailout was agreed on 6 October, with German banks to contribute €30 billion and the Bundesbank €20 billion to a credit line.[6]
After the second crisis summit some politicians demanded that HRE's top management resign, among them Federal Minister of Finance Peer Steinbrück who stated that he had been kept in the dark[7] and that it was "unthinkable" to keep dealing with them, especially after they had used lawyers against the government to attempt to evade responsibilities.[8] CEO Georg Funke subsequently stepped down, replaced by Axel Wieandt on 31 October 2008.
[edit] February 2009: Further guarantees
Via several steps, Hypo Real Estate was granted further framework guarantees by the German Financial Markets Stabilisation Fund (SoFFin) in February 2009, taking its total state funding to €52 billion.[9]
[edit] April 2009: SoFFin takeover offer
On 17 April 2009, SoFFin tendered an offer to take over Hypo Real Estate by buying and creating shares that would raise its equity stake to 90%. On 24 April 2009 the HRE governing boards recommended that shareholders approve the offer by the rescue agency.[10] By that date, government support for the company had reached €102 billion. Under a new law passed in March, the government could force the sale if shareholders reject it.[11]
Meanwhile, the German parliament formed a committee to investigate the HRE bailout. Opposition parties from the left and right spurred creation of the committee, while the governing centrist coalition abstained.[12]
[edit] Subsidiaries
- Hypo Real Estate Bank International
- Hypo Real Estate Bank
- Hypo Public Finance Bank
- Hypo Pfandbrief Bank International
- DEPFA Bank
- DEPFA Deutsche Pfandbriefbank
[edit] References
- ^ a b c d "Annual Report 2007". Hypo Real Estate Holding. http://www.hyporealestate.com/eng/pdf/Group_GB07_englisch_080327_06_30_final.pdf. Retrieved on 2008-08-31.
- ^ a b "Deal to save Germany's Hypo Real Estate fails". Associated Press (International Herald Tribune). 4 October 2008. http://www.iht.com/articles/ap/2008/10/04/business/EU-Germany-Bank-Bailout.php. Retrieved on 2008-10-04.
- ^ "Hypo Real Estate buy of Depfa cleared by EU". AFX News (Forbes). 29 August 2007. http://www.forbes.com/markets/feeds/afx/2007/09/28/afx4166997.html. Retrieved on 2008-08-31.
- ^ a b Kennedy, Simon (29 September 2008). "Hypo Real Estate's shares tumble after rescue". MarketWatch. http://www.marketwatch.com/news/story/germanys-hypo-real-estate-gets/story.aspx?guid={FE3DD6DF-7BDB-48BB-BF58-CB2E56A018CB}&dist=msr_29. Retrieved on 2008-10-04.
- ^ Suess, Oliver (17 November 2008). "Hypo Real Says Bailout to Weigh on 2008, 2009 Results". Bloomberg. http://www.bloomberg.com/apps/news?pid=20601206&refer=realestate&sid=abyzE3AwJ_LE. Retrieved on 2009-02-17.
- ^ Parkin, Brian; Suess, Oliver (6 October 2008). "Hypo Real Gets EU50 Billion Government-Led Bailout". Bloomberg. http://www.bloomberg.com/apps/news?pid=20601087&sid=amxJTktF7JMs&refer=home. Retrieved on 2008-10-06.
- ^ Deutsche Welle. Berlin has Given a Blanket Guarantee for all Private Bank Savings. (English) Retrieved 2008-10-06. (video, English) Merkel: "we also pledge that those who have conducted business irresponsibly will be held to account. The government will ensure that that happens."
- ^ Deutsche Welle. German Government Under Pressure to Deliver on Crisis Promise. 2008-10-06. Retrieved 2008-10-06
- ^ "Troubled Hypo takes more help from German govt". Reuters. 11 February 2009. http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSLB10301220090211. Retrieved on 2009-02-17.
- ^ Hypo Real Estate Group (2009-04-25) (PDF). Hypo Real Estate Holding AG issues Statement regarding the Takeover Offer by SoFFin. Press release. http://www.hyporealestate.com/eng/pdf/042409_PI-Stellungnahme_Endfassung_Engl.pdf.
- ^ "German government to take control of Hypo Real Estate". Deutsche Welle. 2009-04-24. http://www.dw-world.de/dw/article/0,,4204982,00.html.
- ^ "German Parliament to Probe Hypo Real Estate Rescue". Wall Street Journal (Associated Press). 2009-04-23. http://online.wsj.com/article/SB124049178475547739.html.
[edit] External links
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