HRE may need more state cash
DDP/The Local · 19 Jul 2009, 12:59
Published: 19 Jul 2009 12:59 GMT+02:00
“I wouldn’t be surprised if a capital injection of €10 billion isn’t enough,” Michael Endres, head of the bank’s board of directors told the newspaper.
Estimates suggest the bank is running on a deficit of between €6 billion and €10 billion, and the state has so far only invested €3 billion in the bank.
Endres blamed further burdens from bad mortgages for the ongoing solvency problem at HRE. He also attacked the bank’s former head Georg Funke for his mismanagement before the global financial crisis.
He accused Funke of giving out credit in countries where HRE was not represented and whose financial situation the bank did not understand. Endres also refuted the idea that the collapse of US investment bank Lehman was the only cause of HRE’s troubles. “That was just the trigger,” he said.
A special fund for stabilising the financial market currently holds 90 percent of the HRE Holding company. The state is using squeeze-out compensations to try to aid and restore the bank without interference from other shareholders.