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MUNICH, GERMANY-Hypo Real Estate posted a pre-tax loss of $540.5 million for the first quarter. This same period last year, the company was in the green with $252.9 million in revenue. Net loss was $508.5 million.

“As was the case in the previous quarters, the first quarter of 2009 again posed a major challenge for the Group and its employees in market conditions which continued to be difficult,” says CEO Axel Wieandt, in the earnings report.

The company points to the crisis on the international capital, financing and real estate markets aswell as the costs of liquidity support for the reasons behind the severe decline.

Hypo Real Estate’s total portfolio declined from $558.7 billion of assets at year-end 2008 to $547.3 billion at the end of Q1.

To fix this decline, Wieandt says, “We are however, making good progress with restructuring the Group.” As one example, the company now employees 1,656 people instead of the 1,786 employees it had on the bank role at the end of 2008.

As reported by GlobeSt.com at the beginning of April, the German government offered to buy Hypo Real Estate for $1.85 per share. While this deal is still on the table and shareholders are expected to vote on it this summer, Hypo made no mention of it in its earnings report.

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