BUSINESS

Sale speculation as Depfa moves €900m

Sale speculation as Depfa moves €900m


Depfa is being wound down but may be of interest to companies seeking an EU banking licence - like fintechs or UK operations impacted by Brexit, said one well-informed analyst.. Photo: Yui Mok/PA
Depfa is being wound down but may be of interest to companies seeking an EU banking licence – like fintechs or UK operations impacted by Brexit, said one well-informed analyst.. Photo: Yui Mok/PA

Dublin-based Depfa bank has redistributed more than €900m off its balance sheet and back to its German parent bank, in a move that analysts say could presage a sale of the IFSC outfit.

Depfa is being wound down but may be of interest to companies seeking an EU banking licence – like fintechs or UK operations impacted by Brexit, said one well-informed analyst.

Depfa transferred more than three billion shares to Munich-based FMS Wertmanagement (FMS-W) – a ‘bad bank’ that is winding down its balance sheet. Depfa also sought approval from the High Court to make changes to its share capital to allow redistribution of excess capital, documents showed.

A sale of Depfa would close a chapter in Irish banking history that saw debts in the small IFSC-based bank become a significant issue for the German banking sector in the wake of the Lehman Brothers collapse in 2008.

It had been bought the previous year by German bank Hypo Real estate, but was taken over by FMS-W as part of a multi-billion bailout by the German state.

Depfa did not respond to queries from the Sunday Independent.

One analyst said that the financial action by the bank this week did not necessarily indicate that a sale is underway. However, the timing could be opportune – given that financial institutions are looking to Dublin for post-Brexit location.

“They have carried out other transactions in the past to optimise the balance sheet,” said the analyst, adding that there has been speculation for some time about a sale.

But he said buying Depfa would potentially be a quick way for a fintech or other entity to obtain an EU banking licence, were it to be approved by regulators.

“The biggest advantage that the institution has is that it has a full banking licence in Ireland.

“Anyone looking to establish a bank presence in the EU 27 – potentially because of Brexit or other reasons – could utilise the existing banking licence.”

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