HypoVereinsbank appears to have shaken of its problems with real estate after posting a strong rise in first quarter earnings.
Since the group’s merger – between Hypo Bank and Vereinsbank in 1998 – it has been dogged by provisions for real estate losses following speculative investment in the sector by Hypo Bank after German unification. In 1999, it set aside provisions of €1.02bn (DM2bn) for real estate losses after a stricter lending policy was put in place. This followed previous provisions of €2.56bn (DM5bn).
The group saw operating profits rise to €705m (DM1.38bn), against €91m (Dm178m) for the same period last year. Pre-tax profits rise to €617m (DM1.2bn), against €51m (DM101.8m) and loan loss provisions fell 60% to an adjusted €618m (DM1.2bn).
