Hypo Real Estate Holding posted a net loss for the first quarter as it took further write-downs on its loan books and increased its risk provisions aggressively to account for fresh losses.
The company, which is in the process of being nationalized by the German government, reported a €382m ($512m) net loss for the first three months of the year, compared with a €148 million profit a year earlier.
Earnings were hurt by €85m in mark-downs related to Hypo Re's counterparty risks. Risk provisions jumped to €196m from €33m.
The lender also booked a €108m net loss on commission income, largely related to €129m in costs for liquidity guarantees from the German government.
Wall Street Journal