Eurohypo has denied plans to offload risky assets worth billions of euros into a joint bad bank with Hypo Real Estate.
“There is no ongoing discussion about anything like that,” said Frank Pörschke, Eurohypo’s chairman, in an interview with EuroProperty.
Pörschke’s is the first official denial of the story, which proposed the German government as the architect of such a scheme.
The story has been in the German press for weeks, but so far all parties concerned have refused to comment. “It is lacking any kind of substance,” added Pörschke.
Pörschke also refuted reports that Eurohypo needs an extra €3bn-€4bn in equity owing to writedowns on government bonds. “I definitely cannot confirm any need [to raise capital]. I simply don’t know where it is coming from,” he said.
Pörschke did confirm that Eurohypo hardly writes any new loans and that it intends to shrink its €80bn commercial property portfolio by 15%-20%. But this would be achieved through loans maturing rather than selling them.
“Why should we sell at a heavy discount if we think we’re going to get our money back?” asked Pörschke.
