Berlin - German state-owned Landesbank Baden-Wuerttemberg (LBBW) is to receive a 5-billion euro (6.3-billion-dollar) capital injection, the bank announced Friday, amid reports that the world financial crisis had forced it deeper into the red.
The LBBW's owner, the state of Baden-Wuerttemberg, is to provide the capital support for the bank, which, shareholder sources told Deutsche Presse-Agentur dpa, is likely to run up a 2-billion-euro loss in the current year.
In announcing the capital injection, LBBW became the latest German bank to seek out state aid to help it limp through the current financial crisis.
Munich-based publicly-owned BayernLB was the first bank to ask for state assistance, tapping a special federal government bank rescue fund last month for 5.4 billion euros.
The moves are also likely to add to pressures for consolidation in Germany's state banking sector, in particular between LBBW and BayernLB.
Alone in October, LBBW is estimated to have clocked up an 800-million-euro loss, with the Stuttgart-based bank's loss for the first nine months of the year coming in at 900 million euros.
The capital injection helped to boost LBBW's core capital ratio to 9 per cent from 7.3 per cent. (dpa)
- Decision on gas price revision taken under RIL’s coercion: Dasgupta
- Government to pay $8.1 billion fuel subsidy in fourth quarter
- Oil firms falls as government considers export parity pricing model
- Essar Oil to sign $1 billion financing co-operation deal with CDB
- ONGC may sell stakes in deep-water blocks to Shell