A FURTHER €17 million has been spent this year on restructuring at Dublin bank Depfa as 145 jobs have been cut at the troubled lender since the start of the year.
Staff numbers at Depfa, which almost brought down its German parent, Hypo Real Estate (HRE), when it failed to secure short-term funding last September, fell to 545 at June 30th, down from 699 at the end of last year.
Wages and sales at Depfa, which is based in the International Financial Service Centre in Dublin, fell to €37 million at June 30th from €77 million a year earlier, according to the bank’s half-year accounts filed on the Irish Stock Exchange.
Costs fell to €103 million from €146 million in the first six months due to lower variable pay and the downsizing of Depfa as part of the restructuring of the HRE group.
Hypo set aside €56 million to cover restructuring costs in the last quarter of last year but this was increased by €17 million as a result of “new information and some locations closing sooner than originally planned”.
Loans declined to €112 billion at June 30th from €121 billion at the end of last year, while the bank set aside €463 million to cover losses on loans, an increase from €436 million six months earlier.
Depfa, which is to be used to house bad assets across the Hypo group, posted a net loss after tax of €30 million in the first half of the year, compared with a net profit of €105 million a year ago.
Total group liabilities were €227 billion at June, down from €249 million six months earlier.
Depfa said the refinancing of its operations was affected by the “difficult and in certain cases illiquid financing and capital markets as well as the specific extremely difficult situation of the group and its parent, the HRE group”.
Last week HRE, which is 90 per cent owned by Germany’s bank rescue fund Soffin, posted a net loss of €750 million, compared with a profit of €12 million in the same period last year. Hypo has received €102 billion in credit lines and debt guarantees from the German government and financial institutions. Soffin plans to take control of the lender, which needs further capital beyond the €3 billion invested by Germany in June.
