Berlin - The head of Germany's state-owned KfW development bank resigned Monday as a result of the financial market crisis that has severely dented performances at German banks.

Ingrid Matthaeus-Maier, 62, had resigned with immediate effect over the troubles at the IKB Deutsche Industriebank, in which the KfW holds 43 per cent, according to information received by Deutsche Presse-Agentur dpa.

The IKB has been badly hit by its speculative trading in the US subprime mortgage market and has had to be bailed out repeatedly. The total of the packages put together so far reaches 8.5 billion euros (13 billion dollars), with the KfW stumping up 6 billion.

The IKB is mainly involved in providing long-term finance for medium-sized German companies.

The KfW was set up after World War II as a state-backed financial institution aimed at providing funds for rebuilding the German economy.

It had long been rumoured that Matthaeus-Maier's contract would not be renewed when it came up for renewal next year. (dpa)