Munich - Hypo Real Estate, the German finance company which nearly collapsed in September, reported a third quarter pre-tax loss of 3.1 billion euros (3.8 billion dollars) on Wednesday.

The deficit, which was greater than analysts expected, was due mainly to 2.5 billion euros in writedowns for its Dublin-based subsidiary Depfa, the company said in a statement.

The loss came after a profit of 237 million euros for the same period of 2007.

The Munich-based mortgage lender said it was also hit by the collapse of Lehman Brothers, investments in Iceland and its own debt obligations arising from speculative shareholdings.

Hypo Real Estate won 50 billion euros in loan guarantees from the German government and banks in October to stave off financial collapse because of losses incurred by Depfa.

Two weeks ago it sought a further injection of 15 billion euros from a new government stabilization fund established to help banks caught up in the credit squeeze.

The company said it expected negative results in the fourth quarter related to the costs of taking advantage of the liquidity facility.

"Overall, the market environment remains difficult. The costs of the 50-billion-euro liquidity facility and the restructuring will also impact on results for 2009," the statement said.

Hypo Real Estate shares were down 4.08 per cent to 3.76 euros in Frankfurt, following the announcement of the results. (dpa)