Nov 3, 2008, 20:51 GMT
Frankfurt - Three key German banks announced Monday they were tapping the government's 470-billion-euro (600-billion-dollar) rescue fund in the wake of the world financial crisis.
Germany's second biggest bank Commerzbank AG said it was seeking an 8.2-billion-euro capital injection after reporting a third-quarter loss.
Two banks run by Germany's states, HSH Nordbank AG and WestLB, said they had turned to the fund. HSH sought 30 billion euros in debt guarantees after posting a nine-month loss. WestLB did not disclose the scale of debt guarantees it applied for.
HSH reported a nine-month loss of about 360 million euros, reversing a 337-million-euro profit run-up in the same period last year.
The Commerzbank announcement came as the bank unveiled a 285- million-euro net loss in the three months to the end of September in the wake of the world financial crisis.
The third-quarter loss compared to a 339-million-euro net profit in the same period last year.
As a result of receiving the capital injection, Commerzbank said it will not pay a dividend this year and in 2009 and will limit the annual salary of its chief Martin Blessing to 500,000 euros.
'We have decided to make use of the package because this is good for the bank, its employees and its clients,' said Blessing. Commerzbank shares rose 6.8 per cent in early trading Monday.
Commenting on the capital injection from the fund, Commerzbank said the increase 'reflects the sharp rise in capital requirements demanded by supervisory authorities, rating agencies and the capital market in the wake of the financial crisis.'
Announcing its latest quarterly results, Commerzbank said it was increasing loan loss provisions to 628 million euros from 414 million euros.
Commerzbank's decision to turn to the government rescue fund followed comments made on Sunday by Deutsche Bank AG Josef Ackermann again ruling out Germany's biggest bank taking advantage of the bail-out scheme.
Ackermann told German television that Deutsche was strong enough without state aid.
However, Munich-based state BayernLB has already said it will tap the government fund for 5.4 billion euros.
So far three of the eight German landesbanks, companies which are controlled by the 16 German states, have sought state aid. BayernLB and WestLB have already been promised bail-outs from their own shareholders as well.
The fifth company that approached the new guarantees authority for help, stockmarket-listed mortgage lender Hypo Real Estate AG, is to receive a 15-billion-euro government guarantee from the fund.
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