Hypo Real expects rescue to impact 2009 earnings

Hypo Real Estate Holding AG, the German property lender bailed out last month, expects the costs for its government-led rescue and restructuring to weigh on earnings in 2008 and 2009.

"We are predicting an extremely negative consolidated result for the whole of 2008," Hypo Real Estate Chief Financial Officer Markus Fell said in an e-mailed statement yesterday. "The necessary restructuring of Hypo Real Estate and the costs of the agreed or planned liquidity lines and capital assistance will continue to pose a major strain in 2009." The Munich-based company reported on Nov 12 a wider-than-estimated third-quarter loss of 3.1 billion euros after a 2.5 billion-euro goodwill writedown for Depfa Bank Plc. The company sought a 50 billion-euro lifeline last month from Germany's bank-rescue fund after Dublin-based Depfa failed to get short-term funding amid the credit crunch.

"For the time being, Hypo Real Estate won't be able to adequately refinance the company via the money and capital markets alone," Chief Executive Officer Axel Wieandt said in the statement. Wieandt, formerly head of corporate development and corporate investments at Deutsche Bank AG, replaced Georg Funke on Oct 7.