Deutsche Slam

FRANKFURT, September 29, 2008 (AFP) – Shares in German banks posted steep losses Monday as a distressed real-estate lender said it had been thrown a lifeline by a bank consortium while also issuing a profit warning.

Chronic financial market turmoil, meanwhile, was met with fresh refinancing operations by the European Central Bank.

Shares in Hypo Real Estate, a specialist in property financing, plunged to 5.32 euros in morning trades, a massive loss of 60.56 percent.

In the first 30 minutes of trading, the stock had initially lost up to three-quarters of its value.

The real-estate lender said it had received an unspecified credit line from a group of German banks, but warned its results would be affected by a write down in the value of its German-Irish investment unit Depfa Bank.

HRE also said it did not plan to pay a dividend this year.

According to the Financial Times Deutschland, Depfa had made long-term bets backed by heavy loans, often refinancing them only at the last minute, which amid the current global credit crisis was no longer possible.

Other German financial stocks were also hit by heavy selling on Monday.

The second biggest bank, Commerzbank, saw its shares fall