According to the report, issued by financial regulator Bafin, Germany’s state-owned Landesbanken have €355 billion of troublesome items on the books, including €180 billion worth of so-called ‘toxic assets’ and €175 billion worth of assets that are currently illiquid, due to the worldwide credit crunch. The troubled HSH Landesbank accounts for €100 billion of the troubled Landesbanken assets.
Hypo Real Estate, the Munich property lender that has already received €100 billion worth of guarantees and capital from the German government, has €268 billion worth of troubled assets, according to the Bafin report cited by Der Spiegel.
Private banks, including Deutsche Bank and Commerzbank, account for an additional €139 billion of troubled assets, including €53 billion worth of toxic assets and €86 billion worth of illiquid assets. Deutsche Bank does not appear to have any toxic assets, according to the report.
The Volksbanken and Raiffeisenbanken, which operate on a cooperative model, hold about €54 billion worth of troubled assets, €25 billion of which are toxic assets and €29 billion of which are currently illiquid.
A Bafin spokesman warned that the sums were easily open to false interpretation and needed to be evaluated with great care. Portions of the sums included state deposits with “extremely minimal” risk, the spokesman said.
Bafin has engaged the Munich prosecutor’s office to investigate how the highly sensitive information was leaked to both Der Spiegel and the daily Süddeutsche Zeitung, which first released excerpts of the report on Friday.