German property group Hypo Real Estate said today that it might miss its 2008 targets owing to turmoil on financial markets, a day after the country's biggest bank issued a similar profit warning. The group has a presence in Dublin's IFSC.
'The conditions for the Hypo Real Estate Group have become more difficult since the beginning of 2008,' the company said in a statement. 'It is thus not possible to preclude the possibility that the forecasts for financial 2008 will not be entirely met,' it added.
The company also said it cannot rule out possible further charges this year.
In January, Hypo Real Estate forecast pre-tax profit of €1-1.2 billion this year. But it had to take a €300m charge on US collateralised debt obligations (CDOs) last year and said the 'market situation for this asset class has deteriorated even further so far this year.'
CDOs are financial instruments backed in part by high-risk, or sub-prime, US mortgages on which borrowers have defaulted in large numbers.
Deutsche Bank said yesterday that it might miss 2008 earnings targets due to the subsequent international financial turmoil that the biggest German bank has managed to scrape through reasonably well so far.
