NATIONALISED GERMAN prop-erty lender Hypo Real Estate Holding (HRE), owner of troubled Dublin lender Depfa, anticipates an overall loss in 2010 despite returning to profit in the fourth quarter.

The group said the pbb Deutsche Pfandbriefbank, HRE’s only remaining lending company, is expected to have posted a €90 million profit in the fourth quarter.

The bank has shifted an estimated €173 billion of loans and securities to a new bad bank. It will publish its 2010 accounts in April, in which it is expected to post an overall loss.

“The restructuring of the company over the last two years is proving its merit,” said Manuela Better, the HRE group’s chief executive in a statement. “All group entities were profitable in the last quarter” of 2010.

Since nationalisation in 2009, HRE has moved its toxic assets to a bad bank called FMS Wertmanagement (which translates as Finance Market Stabilisation Value Management). The comp- any said that “results for the fourth quarter can only be projected to future quarters to a limited extent”.

The results were posted a day after a leaked German government analysis suggested Berlin should “seriously consider a wind-down” of the lender.

The analysis comes to the conclusion that the sale of the bank in three to five years will bring no greater return than a liquidation now.

HRE said yesterday the group’s priority was to end its state ownership.

“We continue to work towards the reprivatisation of pbb Deutsche Pfandbriefbank with the goal of using the revenue that reprivatisation would produce to repay a further, considerable part of the state aid,” wrote Ms Better.

Lehman Brothers’ collapse in 2008 prompted a liquidity crisis at Depfa, forcing Hypo Real Estate to the brink of collapse.

In two rescue efforts, the German state and private banks provided a total of €10 billion in capital and up to €142 billion in credit and guarantees to the banking group.