BERLIN (AP) - Landesbank Baden-Wuerttemberg, Germany's largest state bank, said Friday it would receive a euro5 billion ($6.3 billion) cash injection from its shareholders and that it expected a loss in 2008 as the financial crisis takes its toll.
The bank said it had vowed to strengthen its capital base during its shareholders meeting Friday, and that it expected the cash injection to be complete by the end of February or the beginning of March. The bank's biggest shareholder is the southern state of Baden-Wuerttemberg.
"LBBW will become noticeably strengthened and will be able to continue its role as a dependable middle-tier business lender," said Guenther Oettinger, the governor of Baden-Wuerttemberg and the chairman of the banks' bearer shareholders.
"This, in light of the current situation, is very important to the economy of Baden Wuerttemberg," Oettinger said.
LBBW said the turbulence on financial markets caused it to book a charge of euro1.8 billion in the January to September period, which will cause a loss for the full year 2008.
LBBW and subsidiaries Landesbank Rheinland-Pfalz and Sachsen Bank saw a loss of euro884 million in the nine months before taxes and restructuring costs.
In late October the bank had said that despite the global economic downturn, it did not expect to need additional capital or state help.
The bank also said it would "strategically modify" its business model to become "leaner and more effective." |