Hypo Real Estate Bank AG:Hypo Real Estate Group preparing on basis of declaration of intent by Sonderfonds Finanzmarktstabilisierung to acquire a stake in the share capital of Hypo Real Estate Group the consolidated financial statements for 2008

Hypo Real Estate Bank AG / Final Results

Release of an Ad hoc announcement according to § 15 WpHG, transmitted by
DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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*Hypo Real Estate Group preparing on basis of declaration of intent by
Sonderfonds Finanzmarktstabilisierung ('SoFFin') to acquire a stake in
the share capital of Hypo Real Estate Group the consolidated financial
statements for 2008
*Unaudited consolidated pre-tax loss: EUR 5.375 billion
*Special effects and one-off effects with considerable negative impact on
results

Frankfurt/Munich, 28 March 2009: Hypo Real Estate Holding AG

The German Financial Markets Stabilisation Fund (SoFFin) intends to take
action to stabilise Hypo Real Estate Group, in the interest of stabilising
the financial markets; specifically, SoFFin will implement measures to
achieve a sufficient recapitalisation of Hypo Real Estate Holding AG, and
will extend further guarantees. This was confirmed today by SoFFin in a
declaration of intent issued to Hypo Real Estate Holding AG and Hypo Real
Estate Bank AG.

This declaration of intent issued by the SoFFin enables the management
boards of the companies in the Hypo Real Estate Group to make a positive
going-concern assumption and to prepare the consolidated financial
statements for 2008 on this basis. Hypo Real Estate Holding AG published
the key figures for financial 2008 on 28 March 2009 (before audit by the
auditor). Accordingly, the pre-tax loss is EUR 5.375 billion, compared with
a pre-tax profit of EUR 862 million in the previous year (all figures for
2007 on a pro-forma basis, incl. DEPFA Bank plc and its subsidiaries
(DEPFA)). The net income is reported as EUR -5.461 billion. This result
very much reflects the difficult situation on the capital and financing
markets.
The loss is partially attributable to impairments on goodwill and
intangible assets resulting from the first consolidation of DEPFA totalling
EUR 2.482 billion. The situation was exacerbated by numerous special
effects and one-off effects.
For at least the next two years a loss situation can be anticipated. The
medium-term strategic prospects are considered positive.

Group development 2008:

*Operating revenues (the sum of net interest income and similar income, net
commission income, net trading income, net income from financial
investments, net income from hedge relationships and the balance of other
operating income/expenses) were negative (EUR -585 million), and were
accordingly considerably lower than the figure for the corresponding
previous year period (2007: EUR 1.463 billion). This decline is mainly
attributable to the sharply lower net commission income and the clearly
negative net trading income and net income from financial investments.
*Net interest income and similar income increased from EUR 1.471 billion in
the corresponding previous year period to EUR 1.633 billion. Net interest
income was influenced by numerous factors: The non-payment and devaluation
of some instruments of subordinated capital led to income of EUR 353
million. Also making a positive impact were: the infrastructure finance
portfolio which showed an average increase for the year, the drawn
liquidity lines by customers of DEPFA, the net interest income of the
securities which were reclassified out of 'trading' into 'loans and
receivables' (LaR) and high interest income in the money market field.
These were opposed by negative effects: Firstly, net interest income
comprised considerably lower one-off income from sales of receivables,
early repayment penalties as well as redemptions and repurchasing of
financial liabilities than was the case in the previous year. Secondly, net
interest income is significantly depressed by the costs of the liquidity
support which has been provided.
*Net commission income fell appreciably to EUR 32 million (2007: EUR 234
million). This decline is attributable to the lower level of new business
in commercial real estate financing, lower income from asset management,
lower income from new business with customer derivatives and expenses
following the liquidity support which has been provided.
*Net trading income declined to EUR -1.009 billion (2007: EUR -274
million). A valuation change of EUR -395 million was recorded in relation
to synthetic CDOs (2007: EUR -198 million). There were also expenses of EUR
-150 million mainly as a result of derivative positions with Lehman
Brothers. The spread changes relating to other trading holdings also had a
negative impact. For instance market value adjustments due to counterparty
risks had a negative impact of EUR -433 million on net trading income. In
accordance with the amendment of IAS 39 'Reclassification of financial
assets' which was published by the IASB and endorsed by the EU in October
2008, the Hypo Real Estate Group reclassified assets with a carrying amount
of EUR 3.5 billion out of 'trading' into the category 'loans and
receivables' retrospectively as of 1 July 2008. In addition, the Hypo Real
Estate Group reclassified further trading holdings with a carrying amount
of EUR 0.7 billion as of 1 October 2008. Without these reclassifications,
net trading income in 2008 would have been EUR 736 million lower.
*Net income from financial investments amounted to EUR -1.409 billion
(2007: EUR 6 million) as a result of numerous impairments in relation to
financial investments. The further impairment in relation to the cash CDOs
included under this position amounted to EUR -762 million in the full year.
MBS were impaired by EUR -528 million. In addition, net income from
financial investments also includes the impairment of EUR -74 million in
relation to a shareholding in Babcock & Brown which is now written off
entirely. In addition, in 2008, an impairment of EUR -25 million was
recognised in relation to securities of the American investment bank Lehman
Brothers, and an impairment of EUR -38 million was recognised in relation
to securities of Icelandic banks; a portfolio-based impairment of EUR -24
million was also recognised in relation to assets which were reclassified
into the category LaR in accordance with IAS 39.
*Net income from hedge relationships amounted to EUR 86 million (2007: EUR
11 million).
*The balance of other operating income/expenses amounted to EUR 82 million
(2007: EUR 15 million), and resulted mainly from effects of foreign
currency translation of EUR 96 million.
*The additions to provisions for losses on loans and advances increased to
EUR 1.656 billion (2007: EUR -61 million) as a result of the considerable
global economic downturn and the deterioration of the situation in some
real estate markets. The addition to provisions for losses on loans and
advances contain portfolio-based allowances of EUR 501 million.
*General administrative expenses fell to EUR 605 million compared with the
previous year (EUR 656 million).
*In consequence of the collapsed interbank market in mid-September 2008, it
was no longer possible to conduct the business of DEPFA on the same basis
as assumed at the acquisition date on 2 October 2007. Accordingly, an
impairment on goodwill and DEPFA's intangible assets totalling EUR -2.482
billion was recognised in the third quarter of 2008.
* The balance of other income/expenses accounts EUR -47 million (2007: EUR
-6 million)

Net assets and capital ratios:

*The total assets of the Hypo Real Estate Group amounted to EUR 419.7
billion as of 31 December 2008, compared with EUR 400.2 billion as of 31
December 2007. The increase in total assets resulted mainly from higher
financial investments and other assets.
*The total volume of lending as of the end of December 2008 amounted to EUR
267.3 billion compared with EUR 256.2 billion at the end of 2007.
*Shareholders' equity (excluding revaluation reserve) amounted to EUR 2.6
billion as of 31 December 2008 compared with EUR 7.9 billion as of 31
December 2007.
*Taking into account the negative net income for 2008, the regulatory
minimum ratio requirements would not have been met by 31. December 2008.
According to regulatory standards, the calculation of own funds for the due
date 31. December 2008 had to happen without the year end results, due to
the fact that at the time of the Solvency Reporting to the Supervisors, the
approved annual financial statement was not yet existing. This would have
been the pre-requisite to include the net result. On the basis of the
declaration of intent of the SoFFin, the Company is assuming that it will
again be able to meet the requirements relating to regulatory minimum
ratios following the intended capital support even if the net loss for the
year is taken into consideration.
*Before the approved annual financial statements and before profit
distribution, equity capital totalled EUR 8.172 billion (31 December 2007:
EUR 12.162 billion). As per approved annual financial statements and after
profit distribution, it is EUR 4.997 billion (31 December 2007: EUR 12.405
billion).
*Before the approved annual financial statements and before profit
distribution, the core capital ratio was 6.2 % as of 31 December 2008 (31
December 2007: 8.5 % in accordance with Principle I logic). As per approved
financial statements and after profit distribution, the ratio is 3.4 % (31
December 2007: 8.7 %).
*Before the approved financial statements and before profit distribution,
the own funds ratio is 8.6 % (31 December 2007: 11.1%). As per approved
annual financial statements and after profit distribution, the ratio is 5.7
% (31 December 2007: 11.4 %).
Results of subsidiary banks; servicing of profit-participation
certificates, tier 1 and upper tier 2 instruments:

As already announced, Hypo Real Estate Bank AG has posted a net loss for
the year: the result before taxes (in accordance with German GAAP - 'HGB')
was EUR -2.8 billion, with a net retained loss of EUR -2.6 billion.
Interest on profit-participation certificates issued by Hypo Real Estate
Bank AG after preparation of the 2008 financial statements and due for
payment in 2009 will not be paid. Profit-participation certificates with
final maturity on 31 December 2008 participate in the loss on a pro-rata
basis; accordingly, they will not be repaid at par, but their nominal
amount will be reduced by the amount of the pro-rata loss. As a result of
the net retained loss, Hypo Real Estate Bank AG will not make any
distributions in 2009 on its Hypo Real Estate International Trust I tier 1
bond. Furthermore, within the scope of its corporate planning, the
Management Board of Hypo Real Estate Bank AG envisages the bank to post
losses for at least the next two years. Based on this assumption, the
holders of profit-participation certificates and tier 1 bonds would not
receive any distributions for the relevant periods, and the
profit-participation certificates would share the pro-rata losses.

DEPFA Deutsche Pfandbriefbank AG posted a transferable profit of EUR 17
million after taxes, resulting in a breakeven net retained profit.
Therefore, profit-participation certificates issued by DEPFA Deutsche
Pfandbriefbank AG must be serviced in full for financial year 2008.

The Board of Directors of DEPFA BANK plc has decided that tier 1
instruments guaranteed by DEPFA BANK plc and upper tier 2 instruments of
DEPFA BANK plc will not be serviced in 2009.

Important information:

The figures for Hypo Real Estate Holding AG and Hypo Real Estate Bank AG
published in this document are based on annual financial statements
prepared by the Management Board which have not been audited and have not
yet been adopted by the Supervisory Board. At DEPFA Deutsche Pfandbriefbank
AG, the Supervisory Board has adopted the annual financial statements; at
DEPFA BANK plc, the Board of Directors has approved the annual financial
statements.

Contact:
Reiner Barthuber +49-89-203007-201

28.03.2009 Financial News transmitted by DGAP
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Language: English
Issuer: Hypo Real Estate Bank AG
Von-der-Tann-Str. 2
80539 München
Deutschland
Phone: +49 (0) 89 20 30 07 780
Fax: +49 (0) 89 20 30 07 33 780
E-mail: info@hyporealestate.de
Internet: www.hyporealestate.com
ISIN: DE0008084047, DE0008127200, DE0008127218, DE0008127226, DE0005463251, XS0303478118
WKN: 808404, 812720, 812721, 812722, 812404, 546325, A0NXMH, Eine vollständige Übersicht der Eigenemissionen der Hypo Real Estate Bank AG (ISIN, Börse,Segment) finden Sie unter:, www.hyporealestate.com/7923.php
Listed: Regulierter Markt in München, Düsseldorf, Stuttgart; Foreign
Exchange(s) London, Paris, Luxembourg, SWX

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