FRANKFURT (AFP) — IKB bank reported on Tuesday a nine-month losss of one billion euros (1.58 billion dollars), despite rescues which relieved it of risks totalling 2.2 billion euros.
The bank, which specialises in loans to small and medium-sized businesses, said it had made a net loss "of roughly one billion euros" in the first nine months of its 2007-2008 year.
That contrasted with a profit of 142 million euros in the same period a year earlier, it said in a statement.
For the full 2007-2008 financial year, IKB maintained its forecast of a 200-million-euro loss.
IKB, of which the German state-owned development bank KfW owns 45.5 percent, was slammed by losses from investments in securities backed by high-risk, or subprime, US mortgages,
The business lender pulled through only owing to concerted action by the German central bank and private banks which provided IKB with the first of several lifelines.
Subsequent rescue packages involved mainly public funds.
On Tuesday, IKB reported losses of nearly two billion euros on financial instruments and more than one billion euros on securities investments.
"In contrast, the positive result from the assumption of risks by the banking pool amounted to 2.2 billion euros," the statement said.
IKB also earned 410 million euros in net interest income, down from 492 million a year earlier, and 44 million in net fee and commission income, roughly the same level as a year before, it added.
The troubled bank booked 207 million euros in provisions for possible loan losses, compared with 192 million euros in the same period a year earlier.
In its core activity of business lending meanwhile, "IKB succeeded in firmly holding its ground with its customers," the statement said.
IKB was one of the German banks hit hardest when the US subprime home loan market collapsed in August but its core activities are still attractive to potential investors.
The lender said that the sale of IKB stakes held by KfW and the private research fund Stiftung Industrieforschung "is proceeding according to plan."
Both shareholders have signaled that they intend to reduce their stakes, but have not finalised any deals.
"KfW has received a series of interesting, substantiated offers and intends to short list the number of bidders and thereafter start decisive negotiating with due-diligence," the statement said.
Copyright © 2009 AFP. All rights reserved. More »
