Business News
German bank IKB obtains billions more in state aid
Jul 3, 2009, 21:52 GMT
Frankfurt - IKB, a bank which was the first German casualty of the structured-finance debacle, said Friday it had obtained fresh German government guarantees worth 7 billion euros (10 billion dollars) to keep it liquid.
The help came from SoFFin, the German government's banking rescue agency, but remains conditional on regulatory clearance from the European Commission. The help increases the scope of government guarantees to IKB to 12 billion euros.
A statement from the Dusseldorf-based bank said its balance-sheet loss in the year ended March 31, 2009 amounted to 580 million euros, a huge increase over the loss of 11 million euros the previous year.
IKB, which lends to small industry, was brought low by the financial crisis in 2007 and was sold last year to Lone Star, a US private-equity fund. As a condition for state aid, it was required to shrink its business, meaning a cut of one-fifth in its payroll.
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